NDIC reiterates commitment to safeguarding depositors, effective banking supervision

…Explains why CBN revoked licenses of 154MFBs, 6PMBs
Nigeria Deposit Insurance Corporation (NDIC) has reiterated its unflinching commitment to safeguarding bank customers’ deposits, as well as collaborating with the Central Bank of Nigeria (CBN) to ensure effective banking industry supervision.

Speaking at the NDIC special day at the ongoing 2018 Lagos international trade fair on Tuesday, the Managing Director, NDIC, Umaru Ibrahim, noted that the corporation will continue to work closely with the CBN to ensure strict adherence to rules and regulations guiding banking operations.

The NDIC boss, who was represented by the Head, Communication & Public Affairs, NDIC, Mohammed Kudu Ibrahim, stated that the corporation is determined to protect depositors in the domestic financial system against fragrant disregard of extant rules by management of financial institutions in terms of stalling the occurrence of unlawful insider dealings, weak internal control and overall noncompliance to prudential guidelines.

He explained that the NDIC, in collaboration with other stakeholders, will continue to promote good corporate governance in the nation’s banking system.

According to him, as you are all aware, the CBN recently revoked the license of 154 Microfinance Banks (MFBs) and six Primary Mortgage Banks (PMBs) due to their solvency.

“The action became necessary due to the erosion of their capital base, poor liquidity, inept management, as well as some insiders helping themselves with loans they never intend to pay back, and further worsened by the boisterous lifestyle of management that remained at variance with the philosophy of microfinance banking operations.”

He, however, pointed out that the corporation has commenced verification of insured depositors in fulfillment of its core mandate.

“From the record obtained so far, majority of the depositors especially in the MFBs, have less than N200, 000 in their accounts, which implied that the NDIC will hopefully cover 1000 per cent of the deposited funds in the MFBs.”

Speaking on the changing landscape of the Nigerian financial sector brought to fruition the broadening dimension of Mobile Money Operators (MMOs) in Nigeria, adding that this effectively altered the scope and depth of regulatory/supervisory interventions, the NDIC remains resolute in its determination to safeguards depositors’ funds.

As it stands, the number of licensed MMOs by the CBN is currently 23, with eight being “Bank-Led” and the remaining 15 “Nonbank led”.

“As at 2017 year end, the number of accounts in the MMOs stood at over 153 million. The NDIC provides deposit insurance coverage to subscribers of MMOs to the maximum limit of N500, 000 through the Pass-Through Deposit Insurance Framework.

This is to further promote financial inclusion drive across the broad spectrum of the Nigerian economy”, he explained.