I am delighted to be here to present the Handbook, “Basic Knowledge on Banking” to you. The book, which is written in simple and easy-to-read English language, is part of the efforts of the Nigeria Deposit Insurance Corporation (NDIC) to enhance the knowledge of the general public on basic banking and financial matters.
As would be recalled, following the liberalization and deregulation of the Nigerian economy in the mid-1980s, more banking institutions were licensed, more financial products were developed and introduced to the financial market, banks embarked on a massive expansion of their branch networks to bring services closer to both their current and potential customers. Quite expectedly, stiff competition ensued between financial service providers as they strived to mobilize deposits and gain a larger share of the market.
As a means of ensuring that depositors were protected, the government deemed it necessary to establish the Nigeria Deposit Insurance Corporation (NDIC) in 1989 to insure the deposit liabilities of all deposit-taking financial institutions in Nigeria. Apart from insuring the deposits of banks customers, the Corporation also provides financial and technical assistance in the interest of depositors to deserving insured banks. As you might be well aware, in the event of failure of a Deposit Money Bank (DMB), the Corporation guarantees to pay a maximum amount of N500,000 per insured depositor per bank. For depositors of Microfinance Banks (MFBs) and Primary Mortgage Institutions (PMIs), the Corporation pays a sum of N200,000 per depositor per bank. This is in addition to the payment of liquidation dividend.
While significant developments have occurred in the financial services industry in recent times, available evidence shows that an average Nigerian bank customer lacks the requisite knowledge necessary for making important financial and investment decisions. As a result of this lack of basic knowledge of financial issues, many bank depositors had suffered some losses by placing their funds in illegal and unlicensed institutions not insured by the Corporation.
On its part, the Corporation had taken several measures aimed at enhancing the financial literacy of depositors. Some of the measures the Corporation had taken to reach out to the public include publications, seminars, workshop, press briefings and advertisements, airing of jingles on radio and television stations nationwide, road shows, etc.
In its determination to continue to enlighten the banking public, the Corporation has introduced some basic knowledge on banking for the education of our secondary schools students, so that they can have early good start in financial literacy. In this regard, it is my pleasure to present to you these 1,500 copies of the handbook “Basic Knowledge on Banking.” The book covers such important issues as the definition of a bank; types of financial institutions; the reasons why depositors should keep their money in banks; different types of bank accounts; basic information people need when choosing which banks to open accounts in; and basic banking terms.
The decision is based on the need to catch them young in understanding the principles and practices of banking. In view of the need to increase awareness and to reach as many secondary school students as possible, the Corporation would appreciate it if the Ministry of Education in the State could distribute copies of the handbook in the libraries of all Junior Secondary Schools in Benue State so that these young students could have access to them.
Distinguished ladies and gentlemen, on this note, I like to thank you all for your attention.