AN ADDRESS DELIVERED BY THE MANAGING DIRECTOR/CHIEF EXECUTIVE OFFICER, NIGERIA DEPOSIT INSURANCE CORPORATION (NDIC), ALHAJI UMARU IBRAHIM, mni, FCIB, AT THE NDIC SPECIAL DAY AT THE 2015 LAGOS INTERNATIONAL TRADE FAIR ON NOVEMBER 14, 2015
It is indeed with great pleasure for me to be present at this auspicious occasion of the Nigeria Deposit Insurance Corporation (NDIC) Special Day at the on-going 2015 Lagos International Trade Fair. I would like to welcome all our distinguished guests, particularly our royal fathers, top government functionaries, Bankers, captains of industry, members of the academia, trade associations, other professional bodies, gentlemen of the press and other distinguished stakeholders who have found time to join us at this very special event.
I wish to congratulate the President and Executive members of the Lagos Chamber of Commerce for another remarkable achievement in organizing this year’s edition of the Lagos International Trade Fair. With the theme of this trade fair: “Enhancing Value Addition in the Non-Oil Economy”, the Lagos Chamber of Commerce has once again demonstrated its enviable position in collaborating with all stakeholders to diversify the nation’s economy from consumption and an oil-dependent based to that which is driven by multiple revenue earners in which Nigeria has potential in comparative advantage. This approach taken by the Chamber falls within the change mantra of the present administration which is geared towards creating business opportunities, promoting financial empowerment and self reliance, opening up new frontiers for industrial growth.
The NDIC is proud to associate with these noble objectives which are also in consonance with its mandate and mission. The NDIC’s mission is to protect bank depositors and contribute to the stability of the financial system through deposit guarantee, effective banking supervision, prompt payment of guaranteed sums and orderly resolution of failure resolution of failed insured financial institutions. The objective of the prompt payment to depositors and orderly resolution of failed insured sum is primarily to reduce the impact of the bank failure and enhance public confidence in the nation’s banking system.
The Corporation’s consistent participation at the Lagos International Trade Fair provides a unique platform to enhance public awareness on the benefits and limitations of the deposit insurance system (DIS) in Nigeria. The trade fair is also an avenue to showcase the landmark achievements of the Corporation in the last twenty six (26) years of its existence.
Distinguished ladies and gentlemen, it is pertinent to refresh your minds that NDIC was established by the Federal Government through promulgation of NDIC Decree No. 22 of 1988 (now repealed and replaced by NDIC Act 16 of 2006) to operate the deposit insurance scheme in Nigeria. The DIS is one of the pillars of the financial safety-net that is designed to protect small and uninformed bank depositors as well as facilitating safety, soundness and stability of the banking system. In the event of any bank failure, each depositor of a deposit money bank (DMB) and non-interest bank/Islamic bank is entitled to a maximum claim of N500,000 while depositors of microfinance banks (MFBs) as well as primary mortgage banks (PMBs) are entitled to N200,000 per depositor per bank. It is instructive to indicate that these insured ceilings cover over 90 per cent of bank depositors in all deposit taking financial institutions in Nigeria.
Furthermore, the Corporation’s extant law empowers its Board of Directors to review upwards the coverage limits to reflect the economic realities in the country at any given time. However, depositors with claims above the insured sums are entitled to liquidation dividends from proceeds on the sale of physical assets and recovery of debts owed to such failed banks.
Invited guests, ladies and gentlemen, it is unequivocally clear that the financial sector is the engine room for economic growth and development. Permit me to draw your attention to the recent developments in the banking sector through the advent of e-banking platform, mobile payments system and pass through deposit insurance to protect the interest of the banking public with the ultimate goal of banking without borders.
The upsurge in the use of mobile communication which has recorded a phenomenal attraction of about 120 million subscribers or 70 per cent penetration has given a glimpse of hope that financial inclusion can be successful in Nigeria. The Corporation in collaboration with the CBN has embarked on various public awareness initiatives on financial literacy and financial inclusion with a view to drastically reducing the percentage of Nigerians who have no access to any form of financial services from 70 to 20 per cent by the Year 2020.
I wish to also restate that the Central Bank of Nigeria (CBN) had issued a Regulatory Framework for Mobile Payment Services in Nigeria since June 2009. The CBN had also granted licenses to 21 Mobile Money Operators (MMOs) in Nigeria, comprising 15 non-bank operators and 6 bank operators carrying out commercial operations as at January, 2013. Another set of 8 operators of MMOs are currently undergoing stages of pilot run for final licensing. The NDIC on its part had developed a framework for the extension of deposit insurance to individual subscribers of the MMOs in the form of pass-through deposit insurance. The Corporation had also developed a framework for the extension of deposit insurance scheme to depositors of non-interest banks.
Distinguished ladies and gentlemen, since it commenced operations in 1989, the NDIC had been responding creditably well to these emerging developments in the global financial system. Early last year, the NDIC organized a roundtable on Mobile payment services in Nigeria. The roundtable was aimed at highlighting the role of NDIC in the electronic mobile payment system is to protect the interest of the MMO’s subscribers through reimbursement of claims in the event of failure of any MMOs and also to create conducive environment for the operators and also present the country as a global player in the financial service delivery.
Distinguished ladies and gentlemen, I wish to seize this opportunity to once again advise members of the public against patronizing illegal fund managers, also known as “wonder banks” who offer extra-ordinary interest rates on deposits or investments only to disappear after collecting the deposits or investments. These illegal operators are not licensed by the Central Bank of Nigeria (CBN) as deposit-taking financial institutions and as such are not under the NDIC insurance cover. This advice becomes necessary in view of the continued existence of these illegal operators in different forms and styles in various parts of the country and people often approach the Corporation to seek redress after falling victims. For the avoidance of doubt, the Corporation wishes to make it categorically clear that only depositors of banking institutions that are licensed to collect deposits by the CBN, i.e. Deposit Money Banks (DMBs), Microfinance Banks (MFBs), Primary Mortgage Banks (PMBs) and Non-Interest/Islamic Banks are under the NDIC insurance cover.
Permit me at this juncture to also inform this distinguished gathering about a step taken by the Corporation to address depositors’ complaints through the establishment of a 24-hour Help Desk with a toll-free telephone line (080063424357). The Corporation has also redesigned its website www.ndic.gov.ng and integrated it fully with major social media platforms including Facebook, Twitter, Instagram, YouTube and LinkedIn to further enhance public awareness on its mandate as well as facilitate interaction with all stakeholders.
Let me at this juncture enjoin depositors and the general public to continue to avail themselves of the opportunity provided by our Help Desk with a dedicated Toll-free 24-hour telephone line: 080063424357 to contact the Corporation and report all cases of financial abuses by banks for necessary action.
Distinguished ladies and gentlemen, I thank you for your attention and seek your indulgence to come along to the NDIC’s pavilion to be part of our showcase towards protecting the interest of depositors and contributing to financial system stability.
Umaru Ibrahim, mni, FCIB
Nigeria Deposit Insurance Corporation.