By Segun Olatunji, Kaduna
Friday, 17 Dec 2010
The Nigeria Deposit Insurance Corporation said on Thursday in Kaduna that it had plans to reduce the insurance premium on bank deposits, which was a burden in the banking industry.
The NDIC also announced an increase in the deposit insurance coverage levels of deposit money banks from N200,000 to N500,000 and raised that of microfinance banks/primary mortgage institutions from N100,000 to N200,000.
The corporation added that the increase had already taken effect since November this year.
The Chairman, Board of Directors of NDIC, Dr. Hassan Adamu, who disclosed these at the opening ceremony of a two-day strategic retreat of the corporation explained that the reduction in the deposit insurance premium of banks in the country followed the establishment of the financial stability fund in which N1.5tn would be contributed over the next 10 years by both the commercial banks and the Central Bank of Nigeria.
Adamu also said that the increase in the DIS coverage levels of the commercial banks and the microfinance institutions was based on the dynamics of the industry as well as address the public concern for increase in the coverage levels, while ultimately enhancing the confidence of the public in the nation’s financial system.
He stressed that the anticipated reduction in the premium rate payable by the commercial banks would serve as the contribution of the NDIC to the initiative.
“In response to the developments in the Nigerian financial services industry and the global economy, the NDIC had taken some initiatives to enhance its relevance as a critical component of the financial safety net. In particular, the DIS coverage levels were recently increased from N200,000 and N100,000 to N500,000 and N200,000 for deposit money banks and microfinance banks/primary mortgage institutions, respectively,†he said.
The NDIC chairman who was represented on the occasion by a member of the corporation’s board, Miss Benedikta Molokwu, said that the series of workshops, seminars and retreats organised for staff in the past were aimed at planning a strategic direction towards effective discharge of the mandate of the corporation.
He said that the retreat with the theme ‘Repositioning NDIC for operational excellence’ was also designed to help the corporation come up with an appropriate strategic plan that would guide its operations over the next five years to ensure that it evolved a robust deposit insurance system in Nigeria.
Adamu noted that in spite of the numerous achievements recorded by NDIC over the years, challenges in areas of inadequate public awareness of the benefits and limitation of the deposit insurance scheme, inadequate enforcement powers, slow and cumbersome judicial process hampered the corporation’s operations.
Also speaking on the occasion, the NDIC Managing Director, Alhaji Umaru Ibrahim, said that the strategy retreat provided an opportunity for the corporation’s personnel to discuss and brainstorm on the emerging challenges arising from the dynamic operating environment.
“It is in the light of this, for the first time, we have invited external stakeholders, especially the operators of the banking sector, to share their knowledge and experiences with us,†Ibrahim added.
Source: Punch
