From Maurice Okafor, Enugu
The Nigeria Deposit Insurance Corporation (NDIC) has advised bank customers to safeguard their funds by transacting only with banks certified by the Corporation, noting that such a step guarantees recovery of deposits in the event of bank failure.
The Managing Director and Chief Executive of the Corporation, Thompson Oludare, gave the advice in a speech presented during NDIC’s Special Day at the ongoing 37th Enugu International Trade Fair on Friday.
He urged Nigerians to patronise banks and financial institutions that are easily identifiable with the NDIC logo, stressing that this remains a reliable way of ensuring access to their deposits should any bank fail.
The NDIC boss explained that the Corporation has a mechanism that enables it to pay up to five million naira to customers registered with it, while the remaining balance is paid after the failed bank has been liquidated and its assets sold.
He, however, noted that the Corporation does not desire bank failures, adding that it usually advises struggling financial institutions to consider mergers with stronger ones.
Oludare, who was represented by Mrs Gambo Hawa, also warned depositors against engaging with so-called “wonder banks” that promise unusually high returns within a short period, describing such schemes as fraudulent.
“There is no business you can do and gain a profit margin of one hundred percent or two hundred percent,in a matter of two or three months.They are only there to trick you Once they part with your money, they will vanish.
She stressed that NDIC is very much handicapped in recovering such losses because those kind of financial institutions are not registered with legal frame work in their operations.
She advised that the best option is to avoid them totally.
Despite some challenges, the NDIC boss said the Corporation has recorded significant success in protecting depositors’ funds and maintaining confidence in the nation’s banking system, noting that its insurance framework currently safeguards about 99 per cent of customers in Nigerian banks.
Speaking on the theme, “Empowering MSMEs for global competitiveness”, Oludare stated that the NDIC continues to serve as a dependable support system for small and medium enterprises (SMEs) by securing their funds against bank failures.
According to him, the Corporation reviewed and increased its insurance coverage in 2024 to reflect prevailing economic realities.
“Under the revised structure, depositors in Deposit Money Banks (DMBs), Mobile Money Operators, and Non-Interest Banks are insured up to ₦5,000,000, while those in Microfinance Banks and Primary Mortgage Institutions are covered up to ₦2,000,000”,Oludare stated.
Explaining how depositor protection works, Oludare said the NDIC does not rely on government funds to reimburse customers of failed banks, but rather draws from the Deposit Insurance Fund (DIF), which is financed through premiums paid by licensed financial institutions.
He described the system as efficient and sustainable, enabling the Corporation to meet its obligations promptly without putting pressure on public finances.
