Why Depositors Should Not Worry When Their Bank Shuts Down – NDIC Reveals
The Nigeria Deposit Insurance Corporation, NDIC, has explained that over ninety-seven per cent of depositors’ accounts are fully covered by insurance in a case of bank failure.
The corporation assured that depositors would be able to recover their funds with this development in the event of any bank closure and hence should not be afraid of carrying out their transactions.
Naija News reports that NDIC managing director and CEO, Bello Hassan, disclosed this while speaking at the 18th edition of the workshop for business editors and Finance Correspondents Association of Nigeria (FICAN), in Gombe State.
Hassan revealed at the event that the overall number of accounts in the deposit money banks across the country as of 2019 stood at 128.4 million.
The NDIC chief, however, said there is the need to further educate depositors on the importance of coverage as the coverage limits have always been misunderstood by stakeholders.
“In 2016, 2017, 2018 and 2019, the total number of accounts in the deposit money banks stood at 83 million; 99.1million; 112.0 million and 128.4 million respectively. Out of these numbers, the N500,000 coverage limit fully covered 99.4; 97.6; 97.5 and 97.6 per cents of accounts, respectively,” the NDIC DG revealed.
Hassan explained further that the figure entails that only less than three per cent of accounts/depositors are not fully covered by the prevailing insurance coverage limits.
According to him, above 97 per cent of depositors would be able to recover their assets in the case of any bank closure.
He further assured that the corporation seeks amendments that will speed up asset recovery. Hassan noted that “97.6 per cent of accounts are fully covered under the N500,000 current coverage limit of the corporation, adding that the limit is subject to periodic reviews.
“From the foregoing statistics, it could be observed that the corporation’s deposit insurance coverage limits are not only adequate but robust enough to engender confidence in our banking system,” he added.
Hassan explained that the coverage limits are not designed to be static but subject to periodic reviews to ensure that they are consistent with the public policy objectives of the Deposit Insurance System, adding that the corporation successfully reviewed upward the coverage limits from N50,000 at inception in 1989 to N200,000 in 2006 and N500,000 in 2010.