Recapitalisation: NDIC Backs Bigger Banks For Nigeria’s $1Trn Economy

• Eyes new maximum deposit insurance coverage
• Says SCV framework aids speedy insured sums payment

BY CHINYERE OBIORA, OWERRI – The Nigeria Deposit Insurance Corporation (NDIC) is fully backing the proposed recapitalisation of Money Deposit Banks (DMBs) for the country to achieve its vision of running a $1 trillion economy.

This is as the Corporation also said work has reached an advanced stage in reviewing the current maximum deposit insurance coverage to address the adverse impact of macroeconomic developments that have occurred since its last review.

Managing Director of NDIC, Mr Bello Hassan, stated this while addressing journalists at the Corporation’s annual workshop for Business Editors and Finance Correspondents Association of Nigeria (FICAN) holding in Owerri, the Imo State capital.

Obviously backing the recent Central Bank of Nigeria (CBN) Governor, Yemi Cardoso’s proposal to have bigger players in the nation’s banking industry, Hassan said; “Certainly, the government is trying to grow our GDP to $1 trillion, and we also need bigger banks to play in that space.”

He said though the banking sector remains sound in terms of key indicators such as Capital Adequacy, Earnings, Liquidity and Quality of Assets, achieving the dream of a $1 trillion economy requires the biggest of banks as players in the industry.

According to him; “I know as we speak if you look at the performance of the industry, it is very sound, looking at the key financial soundness indicators, capital adequacy, liquidity, earnings, and quality of assets.

“As the government is trying to implement their agenda of growing the GDP to $1 trillion, we also need bigger banks to achieve that.”

On the proposed new maximum Deposit Insurance Coverage (DIC), Bello said the Corporation believes that its approval will ultimately reinforce depositors’ confidence on the NDIC’s deposit guarantee scheme.

Also complementing the consumer protection efforts of the Centrall Bank of Nigeria (CBN), the corporation has enhanced public awareness on the benefits and limitations of the deposit insurance system and financial literacy, to reduce the rate at which small depositors are being defrauded, thereby enhancing confidence in the banking system.

Importantly too, NDIC Chief Executive disclosed that introducing the Single Customer View (SCV) framework has enhanced speedy payment of insured sums to depositors of closed banks while the Commission’s robust collaboration with the bar and the bench has led to speedy dispensation of justice and more informed judgments on failed banks cases.

Additionally, he said besides institutionalising the policy and framework on Alternative Dispute Resolution (ADR) for out-of-court settlement to resolve some hitherto protracted failed bank litigations, the NDIC has reviewed the Framework for Differential Premium Assessment System (DPAS) to make it more risk sensitive.

He explained that the development accounts for significant developments being witnessed in the Nigerian banking system since 2008 when it was adopted for implementation.

Hassan also stated that establishing a special desk at the Economic and Financial Crimes Commission (EFCC) has actually energize investigation and prosecution of parties responsible for failure of banks in the country.

Speaking on making NDIC one of the best deposit insurers in the world”, Hassan said the launch of its 2021–2025 Strategic Plan was formulated in consideration of current realities and trends, as well as the desire to differentiate the Corporation through excellent and efficient services to our stakeholders across board.