In a major move aimed at boosting public confidence in the Nigerian banking system, the Nigeria Deposit Insurance Corporation (NDIC) has announced a substantial increase in deposit insurance coverage for various financial institutions. This revision, announced by NDIC Managing Director Mr. Bello Hassan, significantly bolsters protection for customer deposits across Deposit Money Banks (DMBs), Microfinance Banks (MFBs), Primary Mortgage Banks (PMBs), Payment Service Banks (PSBs), and Mobile Money Operators (MMOs).
Here’s a breakdown of the revised coverage:
- Deposit Money Banks (DMBs): The maximum deposit insurance coverage has been raised from N500,000 to a staggering N5,000,000, offering nearly full coverage (98.98%) to depositors compared to the previous 89.20%.
- Microfinance Banks (MFBs): Coverage has jumped from N200,000 to N2,000,000, ensuring protection for 99.27% of MFB depositors, up from 98.76%.
- Primary Mortgage Banks (PMBs): Similar to MFBs, PMB coverage has been increased from N500,000 to N2,000,000, expanding protection to 99.34% of depositors from the previous 97.98%.
- Payment Service Banks (PSBs): Coverage has been adjusted from N500,000 to N2,000,000, effectively providing near-complete protection (99.99%) for PSB depositors.
- Mobile Money Operators (MMOs): The pass-through deposit insurance for MMO subscribers has witnessed a significant leap, rising to N5,000,000 per subscriber.
The increased coverage signifies a major step forward in safeguarding Nigerians’ deposits. This move is expected to:
- Enhance public confidence: With a substantial increase in insurance limits, Nigerians are likely to feel more secure in keeping their money within the banking system.
- Promote financial inclusion: The expanded coverage, particularly for MFBs, PSBs, and MMOs, could encourage more Nigerians to participate in the formal financial sector.
- Reduce bank panic: In the unfortunate event of a bank failure, the higher insurance limits offer greater protection to depositors, potentially mitigating panic and bank runs.
Overall, the NDIC’s revised deposit insurance coverage represents a positive development for the Nigerian financial landscape. It strengthens the safety net for depositors and paves the way for a more robust and inclusive financial system.
Get started with AutoComply to automate your tax and AML compliance