Nigeria Deposit Insurance Corporation has proposed to insure the deposit of customers of mobile money operators to a maximum of N100,000.This was the highlight of a new deposit insurance scheme for customers of mobile money operators unveiled last week during a roundtable on mobile payment services organised by the Corporation.
In his opening remarks at the roundtable, Managing Director/Chief Executive, NDIC, Alhaji Umaru Ibrahim, said, “The NDIC is considering extending deposit insurance coverage to mobile banking subscribers, with each subscriber guaranteed up to the sum of N200,000 or N500,000 (as applicable to MFB/PMBs and DMBs, respectively) in the event of a bank failure. Alternatively, if a bank fails, then the insured mobile account can be transferred to another sound bank. This is to further engender public confidence in the system thereby promoting financial stability. The NDIC framework for extending deposit insurance to individual customers of mobile payment services is being finalized”.
It will be recalled that the Central Bank of Nigeria (CBN) in 2012 licensed eleven mobile payment operators (MPO). It subsequently licensed additional eleven MPOs bringing the total number to twenty two.
Zacceaus Anate, Director, Insurance and Survellance department, NDIC, however noted that under the present framework for money payment services, MPS in Nigeria, there is no deposit insurance cover for individual customers of MPOs. He said that under the present framework, what is insured is the account of the MPO with banks. “The MPO’s Pool Account is domiciled in the Deposit Money Banks. The Pool Accounts Fund is covered as one deposit account in the name of the MPO with the maximum insured sum of N500,000 in the DMB and N200,000 in MFB/PMB.
The disdvantages of this is that: The customers of the mobile payment scheme will not be covered individually; Insurance coverage would be grossly inadequate; the customers are therefore exposed to risk of loss; It will grossly undermine public confidence and success of the mobile payment scheme.
Hence the Corporation is proposing a Pass-Through Insurance (PTI), whreby the MPO Pool Accounts would not just be regarded as Single Accounts, but that the benefits of the Deposit Insurance will be enjoyed by the individual subscribers/customers of the MPO Pool Account.
The advantages, according to Anate is that: Each customer of the Mobile Payment Scheme as a subscriber to the MPO Account will be covered to a certain limit; PTI will encourage the MPS and enhance financial inclusion; PTI will further engender public confidence in the financial system thereby promoting financial stability.
He said, the NDIC therefore recommends: Adoption of PTI to cover mobile payment subscribers to help fulfil the DIS public policy objective of engendering confidence in the banking system. Consequently, the extension of the Deposit Insurance to the mobile payment subscribers, with each subscriber guaranteed in the sum of N100,00 in the event of a bank failure. The Corporation can therefore transit from two to three levels of N500,000 for DMB, N200,000 for MFB/PMBs and N100,000 for subscribers of the Mobile Payment Scheme.
