The Nigeria Deposit Insurance Corporation on Tuesday said it was currently seeking aid from the World Bank to enable it develop a framework that would be used in determining the strength of its Deposit Insurance Fund.

The Managing Director, NDIC, Alhaji Umaru Ibrahim, said at the International Association of Deposit Insurers Africa Regional Committee Workshop in Lagos, that the framework would be used for the computation of Target Fund Ratio and in determining the adequacy of its DIF.

The DIF is set aside to pay back the money lost due to the failure of financial institutions.

Ibrahim said, “The size of our DIF relative to the quantum of insured deposits in the system leaves much to be desired, as the adequacy of our DIF is still not properly ascertained using the Target Fund Ratio approach in line with the best practice.”

The NDIC boss also said all banks in the country were sound.

Ibrahim, who was reacting to a report in some newspapers that only five banks in Nigeria were healthy, said that the assessment was defective.

“The fact that some banks were marginally ill did not mean that they were not healthy. What was misquoted to be unhealthy was derived from our 2011 Annual Report which does not reflect the true position of banks at the moment,” he added.

On the corporation’s activities, he pointed out that NDIC had so far liquidated 48 deposit money banks and 103 micro finance banks.

Ibrahim said, “Through the process, a total of N6.68bn insured deposits owned by depositors of the 48 closed deposit money banks as at June, 2012 had been settled. Also, a total of N2.64bn out of N4.67bn insured deposits belonging to over 73, 000 depositors of the 103 MFBs in liquidation were settled. In terms of liquidation dividend owed to uninsured depositors, the sum of N78.34bn was paid as dividend to depositors of the 48 banks in liquidation as at June 2012.”

Source: Punch (written by Ademola Alawiye)