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 36TH KANO INTERNATIONAL TRADE FAIR ON NOVEMBER 26, 2015
Permit me to express my great pleasure to be present at this occasion of the Nigeria Deposit Insurance Corporation (NDIC) Special Day at the 36th ongoing Kano International Trade Fair 2015. Let me start by condoling the state government and the wonderful people of Kano State over the recent bomb blast which resulted in loss of lives. May Almighty Allah Bless their souls and give the families the fortitude to bear the irreparable loss and also grant speedy recovery to those who sustained injuries in the ugly incident.
I would also like to welcome our distinguished guests, particularly our Royal Fathers, state government officials, members of the academia, captains of industry, civil society groups, gentlemen of the press and our other esteemed stakeholders who have found time to join us at this very special occasion.
The theme of this year’s trade fair: “Improving Products Quality and Packaging to Ensure Competitiveness for the Attainment of Sustainable Economic Growth” falls in line with the efforts of the present administration to diversify the economy. The objectives are to drive greater business opportunities, promote economic empowerment and self reliance, open up frontiers for industrial development and most importantly improve the quality of life of Nigerians.
In keeping with this year’s theme of sustainability, it might be interesting to note that the NDIC is also adopting Sustainable Banking Principles which are aimed at integrating environmental and social policies into decision making processes as well as mitigating the negative impacts of financial institutions’ operations in the environment and local communities in which they operate.
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your minds that NDIC was established by the Federal Government through promulgation of NDIC Decree No. 22 of 1988 (now repealed and replaced by NDIC Act 16 of 2006) to operate the only deposit insurance scheme in Nigeria.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 facilitate 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 (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.
Distinguished 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 percent 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 percent to 20 percent 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 MMOs are currently in different stages of pilot run before final licensing. The NDIC on its part had developed frameworks for the extension of deposit insurance to individual subscribers of the MMOs in the form of pass-through deposit insurance and to the depositors of non-interest banks to the tune of N500,000 per depositor.
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 to protect the interest of the MMO’s subscribers through reimbursement of claims in the event of failure of any MMO and also to create conducive environment for the operators and also present the country as a global player in the financial service delivery.
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 such 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 who 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), Non-Interest Banks and Mobile Money Subscribers are under the NDIC insurance cover.
Permit me at this juncture to also inform this distinguished gathering about steps 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.
Before I conclude this address, I wish to draw your attention to two other milestones in the NDIC history. In 2013, the Board and Management approved the rebranding initiative which involved a total overhaul of the processes, procedures and systems of the Corporation with a view to achieving effective and efficient service delivery. As you are also aware, depositors and other stakeholders often confuse us with insurance companies. The new slogan on the new NDIC Corporate identity: ‘Protecting Your Bank Deposits’ not only showcases the NDIC as a deposit insurer but also clearly distinguishes the Corporation from conventional insurance companies.
In conclusion, on behalf of the NDIC Management and staff, I wish to express our sincere appreciation to all our special guests, particularly our Royal Fathers who have found time to be part of this special occasion. I also wish to seek your indulgence to join us at the NDIC pavilion to be part of our showcase.
Distinguished ladies and gentlemen, I thank you for your attention.
Umaru Ibrahim, mni, FCIB
Nigeria Deposit Insurance Corporation.