The Nigeria Deposit Insurance Corporation (NDIC) has raised the maximum deposit insurance coverage for all licensed deposit-taking financial institutions. Deposit insurance coverage refers to the protection provided to depositors in deposit -taking financial institutions in case the financial institution fails or goes bankrupt. This coverage ensures that depositors will be reimbursed up to a certain limit for their deposits in the event of a bank failure Bello Hassan, its Managing Director, announced the development at press briefing in Abuja on Thursday.
He said the increase in the deposit insurance coverage was to ensure depositors were better protected in the unlikely event of a bank failure. Hassan said the action would was to strengthen the banking system and encourage further financial inclusion in the country. He said the increase applied to Deposit Money Banks (DMBs), Microfinance Banks (MFBs), Primary Mortgage Banks (PMBs), Payment Service Banks (PSBs) and Mobile Money Operators (MMOs). For the Deposit Money Banks (DMBs), the coverage has been raised from N500,000 to N5,000,000 to provide full coverage for 98.98 percent of depositors compared to the previous 89.20 percent. Microfinance Banks (MFBs) coverage has been increased from N200,000 to N2,000,000, offering full coverage for 99.27 percent of depositors, up from 98.76 percent, and significantly increasing the value of covered deposits (from 14.38 percent to 34.43 percent of total deposits).
For Primary Mortgage Banks (PMBs), the coverage has been raised from N500,000 to N2,000,000 to ensure full coverage for 99.34 percent of depositors, up from 97.98 percent and boosting the value of covered deposits (from 10.77 percent to 21.04 percent of total deposits). Payment Service Banks (PSBs) coverage has been increased from N500,000 to N2,000,000, providing near-complete protection (99.99 percent) for depositors and raising the value of covered deposits to 43.10 percent of the total (from 40.60 percent).
For Mobile Money Operators (MMOs), the maximum Pass-through deposit insurance coverage has been raised to N5,000,000 per subscriber per MMO, aligning it with the coverage level for DMBs. The increase in the deposit insurance coverage is to take immediate effect.
