The purpose of this page is to facilitate the understanding by all our stakeholders, particularly the depositors, of the nature and condition of deposit insurance system and its implementation by the Nigeria Deposit Insurance Corporation.

Answer: Deposit Insurance is a system established by government to protect depositors against the loss of their insured deposits placed with member institutions in the event that a member institution is unable to meet its obligations to depositors. It engenders public confidence in, and promotes the stability of, the banking system by assuring savers of the safety of their funds. 

Answer: If a financial institution is unable to meet its obligations to depositors due to operational problems or business failure, anxious depositors may cause a run on the bank as well as other healthy institutions. The government has therefore established a deposit insurance mechanism, under which the NDIC is empowered to provide protection for small depositors and contribute to financial and social order.

Answer: The NDIC is the agency empowered to administer the DIS in Nigeria, thereby protecting depositors of deposit-taking financial institutions. The NDIC provides incentives for sound risk management in the Nigerian banking system as well as contributes to the stability of the financial system. 


Answer: No. Deposit insurance is different from conventional insurance in several respects. Some of the differences include the following:

a. Deposit insurance is a regulatory tool aimed at ensuring the safety, soundness and stability of a nation’s financial system, thereby protecting the macro-economy at large. On the other hand, conventional insurance policy is designed only to protect the micro-interest of the policyholder.

b. Deposit insurance is usually a tripartite arrangement involving the deposit insurer, the participating institutions and the depositors, whereas conventional insurance is a bilateral agreement between the insurance company and the insured (policy-holder).

c. Under deposit insurance, the participating institution pays the premium while the direct beneficiary of the protection offered is the depositor who does not pay any premium. In the case of conventional insurance, the beneficiary, who is the insured, pays the premium.

d. Best practice dictates that participation in deposit insurance should be compulsory, participation in conventional insurance contract is generally voluntary.

e. Under deposit insurance, best practice prescribes that the amount of coverage should be limited, whereas in the case of conventional insurance, coverage may be full.


Answer: Insured institutions are all deposit-taking financial institutions licensed by the Central Bank of Nigeria (CBN) such as:-
a) Deposit Money Banks (DMBs);
b) Microfinance Banks (MFBs);
c) Primary Mortgage Banks (PMBs); and
d) Non-Interest Banks (NIBs).

e) Payment Service Banks (PSBs)

Membership is compulsory as provided under the NDIC Act No 16 of 2006.


The NDIC provides deposit insurance coverage to subscribers of Mobile Money Operators (MMOs) using the Pass-Through-Deposit-Insurance Concept. It is an arrangement where the deposit insurer extends deposit insurance coverage to Pool Accounts or Trust Accounts domiciled in deposit-taking financial institutions and operated by MMOs. Pool Accounts and Trust accounts have many contributors to the funds. The balances of each contributor in that Pool Account are insured.



The conditions for eligibility as contained in the framework are as follows:
i. The relationship between the MMOs and their subscribers shall be based on Bare Trust arrangement.
ii. MMOs must take Fidelity Bond Insurance.
iii. The records of the Trust (pool) account must clearly indicate that the funds belong to individual subscribers and not the agent or custodian.
iv. The identities of the subscribers must fulfil all KYC requirements specified by the CBN.
v. The interests of the subscribers must be disclosed properly in records maintained by the insured institutions, MMOs and Agents.

Answer: The subscribers of MMOs will be insured up to the maximum coverage level of ₦500,000 (Five Hundred Thousand Naira) per subscriber per DMB or the applicable coverage level for depositors in line with the NDIC Act.

Answer: No. MMOs are not covered under the PTDI but their corporate account in banks are covered up to the maximum amount allowed by law.

Answer: All grievances or queries concerning the Pass-Through Deposit Insurance coverage could be channelled through the NDIC HELP DESK Toll Free Line on 0800-6342-4357 (0800-NDIC-HELP) or send email to helpdesk@ndic.gov.ng, info@ndic.gov.ng.


An agent is an individual or organisation authorised by a MMO to transact business on its behalf in certain locations, while a custodian is an entity with the responsibility for safeguarding, holding and managing subscribers’ funds on behalf of MMOs. It is usually a bank licensed by the CBN.


Answer: An account opened and operated by a MMO in an insured institution on behalf of its subscribers.


Answer: This is a situation where each beneficiary of an account holds a separate share and is entitled to protection within the parameters of the scheme.



Answer: To identify insured financial institutions, look out for an NDIC decal (sticker) displayed in the Head Offices and Branches of all insured institutions or call our HELP DESK LINE – 0800-6342-4357 (0800 – NDIC – HELP); and 234-9-4601030 or visit our website: www.ndic.gov.ng

Answer: The financial institutions not covered by the NDIC include:
a) Development Finance Institutions such as Bank of Industry, Federal Mortgage Bank, Bank of Agriculture and Infrastructure Bank
b) Discount Houses
c) Finance Companies
d) Investment Firms
e) Unit Trusts/Mutual Funds
f) Insurance Companies
g) Pension Fund Administrators (PFAs)
h) Stockbroking Firms
i) Any other institution as determined by the Board of the NDIC as stipulated in the NDIC Act.

Answer: Not all deposits in insured institutions are covered by the NDIC. All deposits of a licenced bank or any other insured deposit-taking financial institution shall be insured with the NDIC with the exception of the following:
i. Inter-bank takings;
ii. Insider deposits (i.e. deposits of staff, including directors of the insured institutions); and
iii. Deposits held as collateral for loans.

Answer: The NDIC insures bank deposits of natural persons as well as legal entities, whether they are from Nigeria or from any other country but resident in Nigeria.

Answer: Participating institutions are required to pay annual premium to the deposit insurance system administered by the NDIC. The premium is assessed based on participating institutions’ total assessable deposit liabilities as at 31st December of the preceding year. The assessable deposit liabilities are total deposits with the exception of some deposits listed in Section 16 of the NDIC Act 2006. The NDIC has adopted Differential Premium Assessment System (DPAS). 


Answer: The NDIC protects the Insurance Fund by keeping it with the CBN and investing the Fund in safe but liquid financial instruments such as Treasury Bills, Federal Government Bonds and instruments of similar nature. 


No. NDIC finances all its overhead and administrative expenses from its investment income. The main source of income for the NDIC is the proceeds from investment of the insurance fund in securities issued by the Federal Government. The insurance fund is used only for paying insured deposits when an insured institution fails as well as for granting financial assistance to deserving participating institutions. The NDIC does not enjoy subvention from the government.

Answer: Yes, a depositor, if he/she wishes, can open an account with the transferee institution for the full amount or part of his/her deposit.

Answer: The primary mandate of the NDIC is to protect depositors. However, through supervision to ensure safety and soundness of banking institutions, the interest of creditors and shareholders are also protected. In the event of bank failure, creditors and shareholders could be paid liquidation dividends after depositors had been fully reimbursed.


Sustainable banking is a value system, which ensures that a bank’s commercial activities do not only benefit its staff and shareholders, but also its customers and the wider economy, while at the same time prevent or at least minimize any undue effects on society and natural environment. Sustainable banking has many labels: corporate social responsibility, corporate responsibility, corporate citizenship, environmental and social governance.

In Nigeria, the Bankers’ committee, which the Central Bank of Nigeria (CBN),NDIC and all the banks in the country are members, pledged to embrace the concept of sustainable banking and went ahead to develop a set of principles called Nigeria Sustainable Banking Principles (NSBP), which all members are required to implement.



The NDIC plays two roles in terms of the implementation of sustainable banking. First as a member of Bankers’ Committee, it is duty bound to implement the agreements of the committee. Secondly, as a supervisor in the banking industry, the NDIC has the duty of ensuring that operators in the system comply with the pledge to adopt the principles in their institutions. As part of its efforts at achieving the implementation and integration process, the NDIC came up with the following initiatives:
i. Set-up sustainability desk in the Managing Director’s office.

ii. Set-up a committee on sustainability to facilitate the implementation of NSBP in the NDIC.

iii. In its effort to integrate environmental and social considerations the NDIC commenced the implementation of energy efficiency initiatives in all its locations nationwide.

iv. The NDIC has invested hugely in ICT to drive most of its work processes e.g. Human Manager, Dispatch Management System, Document Management System, E-learning etc.

v. To further integrate Sustainable Banking and ensure compliance with the principles, an Inter Departmental Committee was constituted to drive the implementation of a paperless environment in the NDIC. Paperless environment not only increases productivity, eliminates storage space, reduces cost and expenses (printing costs, photocopier costs) but also leads to improved ability to work remotely, increased security, improved disaster recovery, reduction in environmental impact.

vi. The NDIC continued to comply with the principles through promotion of Financial Inclusion and Financial Literacy, Collaboration with other stakeholders to promote and expand the Sustainable Banking space, implementation of sustainability principles in its On-site examination processes, training and capacity building for staff on environmental and social risks etc.


FinTech represents the intersection of financial services and technology. It is technology-enabled innovation in financial services. FinTech can refer to technology companies, start-ups or traditional financial services providers. The use of smartphones for mobile banking and investing services are examples of technologies deployed to make financial services more accessible to the general public.


Open banking refers to an emerging idea in the financial services and fintech which stipulates that banks should allow third party companies to build applications and services using the bank’s data. Its benefits include new revenue streams, improved customer experience and can enable financial inclusion.

Answer: It is an unregulated form of monetary value that is used as medium of exchange and for payments. It has no physical form and is not issued by a central bank, therefore it is not insured by deposit insurers like the NDIC. Cryptocurrency is sometimes referred to as virtual or digital currency. The first cryptocurrency is the Bitcoin created in 2009. Others are LiteCoin, Ethereum, etc. 

Answer: No. The Central Bank of Nigeria (CBN) does not recognise Bitcoin or any other form of cryptocurrencies as legal tender in the country.


Blockchain is a form of Distributed Ledger Technology (DLT). This means that, it maintains records of all cryptocurrency transactions on a distributed network of computers, but has no central ledger. It is the technology that has made the first digital currency, the Bitcoin possible.


Answer: A Single Customer View is an aggregated, consistent and holistic representation of the data known by an organisation about its customer. In terms of deposit insurance, it is the collation of all the information on a depositor (all his bank information in every bank across the country) and considered as a single identity. In Nigeria, the Bank verification Number (BVN) system has now created a database where all bank customers are captured and their accounts are linked. The initiative will aid the speed of making pay-out of insured sums to depositors after an insured institution is liquidated.



The NDIC protects bank depositors against loss through:
a) Deposit Guarantee
This is the most significant and distinct role of the NDIC. As a deposit insurer, the NDIC guarantees payment of deposits up to the maximum insured sum of N500,000 to a depositor in DMBs and PMBs and N200,000 to a depositor in MFBs in the event of failure of a participating financial institution. Balances in all deposit accounts held in the same right and capacity by a depositor in all branches of the closed insured institution, net of outstanding debts, are aggregated to determine the maximum insured amount.

b) Bank Supervision
The NDIC supervises banks to protect depositors, ensure monetary stability and effective/efficient payment system as well as to promote competition and innovation in the banking system. Banking supervision seeks to reduce the potential risk of failure and ensures that unsafe and unsound banking practices do not go unchecked. It also provides the oversight functions required to preserve the integrity of and promote public confidence in the banking system.

c) Failure Resolution
The NDIC is empowered to provide financial and technical assistance to failing or distressed banks in the interest of depositors. The financial assistance can take the form of loans, guarantee for loan taken by the bank or acceptance of accommodation bills. On the other hand, the technical assistance may take the following forms: take-over of management and control of the bank; change in management; and/or assisted merger with another viable institution.



The NDIC relies on deposit account records kept by a failed bank as well as on the proofs presented by depositors.


Answer: No. A depositor does not need to. Under the deposit insurance system, eligible deposit accounts in insured institutions are automatically insured at no charge to any depositors.



Insured deposit is payable only when an insured institution has been closed as a result of action taken by the Central Bank of Nigeria or when there is suspension of payment by a bank.


The NDIC could pay depositors of a failed insured institution either by transfer to a financial institution with instructions to effect payments to depositors on its behalf, or directly by means of issuing cheques up to the insured limit which will be collected at the NDIC’s designated centres, usually the closed bank’s offices or by directly crediting the depositor’s account using e-payment platform.
Payments could also be made through Purchase and Assumption, whereby a healthy bank assumes part or all of the deposit liabilities of a failed insured bank and depositors could either withdraw the money at the acquiring bank or continue to maintain its account with the bank.


Answer: The NDIC transfers an amount equivalent to the total insured deposits of a failed insured institution to another financial institution under an agreement which will enable depositors of the failed insured institution to collect their entitlements from the financial institution.

Answer: Insured sums are collected by depositors on filing their claims through the completion of relevant forms provided by the NDIC. In addition, they have to furnish the NDIC with account documents such as unused cheque books, old cheque stubs, passbooks, fixed deposit certificates, etc. Each depositor would also be required to identify him/herself with a valid identification document such as National Identity Card, Driver’s Licence or International Passport. After verification of ownership of the account as well as the account balance, the depositor would be duly paid the insured sum by cheque or deposit transfer through an Agent Bank or Acquiring Bank.

Answer: The depositor would be required to present a Police report along with a sworn affidavit duly certified by a Court. The depositor would also be required to identify himself/herself with a valid identification document like National Identity Card, National Voters Card, Driver’s Licence or International Passport.

Answer: Yes. A depositor, if he/she wishes, can open an account with the transferee institution for the full amount or part of his/her deposits.

Answer: The primary mandate of the NDIC is to protect depositors. However, through supervision to ensure safety and soundness of banking institutions, the interest of creditors and shareholders are also protected. In the event of bank failure, creditors and shareholders could be paid liquidation dividends after depositors had been fully reimbursed.

Answer: This is a payment made to a depositor of a failed insured institution in excess of the insured sum. While the insured sums are paid from the DIF, SIIF or NIDIF as the case may be liquidation dividends are paid from funds realized from the sale of the assets and recoveries of debts owed to the failed insured institution.


The insured limit is currently a maximum of ₦500,000 for each depositor in respect of deposits held in each insured Deposit Money Bank (including Non-Interest Banks) and Primary Mortgage Bank and ₦200,000 for depositor in MFB in the same right and capacity. The amount to be reimbursed has to be defined. Limited coverage is to minimize moral hazard through excessive risk-taking by bank management and depositors. Unlimited coverage could constitute a perverse incentive for excessive risk-taking.


No. The main office and all branches are considered to be one institution. Therefore, the accounts would be added together and covered up to the maximum insured sum.


No. The maximum insurance limit is applicable to deposits in each of the participating banks. In the case of a bank having one or more branches, the main office and all branch offices are considered as one bank. In summary, if a person has many accounts in one bank, all the deposits are taken together as one account even if the deposits are in various branches of the same bank. On the contrary, if a depositor has accounts in more than one bank, they are insured independently up to the maximum insured sum per bank.



No. Deposit insurance is not increased merely by dividing funds held in the same right and capacity among the different types of deposits available. For example, demand, time and savings accounts held by the same depositor in the same right and capacity are added together and insured up to the maximum insured sum.


Section 12 of the NDIC Act 16 of 2006 provides that subject to stated conditions, part of the NDIC’s surplus can be applied to reduce premium payable by insured institutions. Furthermore, the NDIC already applied differential premium assessment for the DMBs and PMBs. However, the NDIC is considering adopting DPAs for the MFBs such that premium payable by such Institutions would be based on their risk profile.


No. Special funds such as Donor funds or other funds that are for onward disbursement to beneficiaries are excluded from assessable deposits. The onus is on the insured institutions to ensure proper classification of such funds in their books.



Answer: Yes. If each of the co-owners has personally signed a valid mandate card and has a right of withdrawal on the same basis as the other co-owners, the joint account and each of the individually-owned accounts are separately insured up to the insured maximum sum.


Answer: As long as the combination of the joint accounts is not the same, the account will be insured separately up to the maximum insured limit. Where the joint accounts are owned by the same combination of individuals then the accounts will be added and the total insured up to the maximum insured sum.



The depositors of the acquired insured MFB or PMB will continue to be insured up to the maximum of ₦200,000 for MFBs and ₦500,000 for PMBs in the aggregate with respect to deposits he or she holds in the same right and capacity.


Answer: Yes. But notice is always given to depositors before termination of insurance. Depositors should take precaution to verify that the MFB or PMB they are dealing with is insured and pay deposit insurance premium annually.


Yes. If the records of the bank indicate that the person is depositing the funds in a fiduciary capacity such funds are insured separately from the fiduciary’s individually-owned account. Funds in an account held by an Executor or Administrator are insured as funds of the deceased’s estate. Funds in accounts held by guardians, conservators or custodians (whether court-appointed or not) are insured as funds owned by the ward and are added to any individual accounts of the ward in determining the maximum coverage. Account in which the funds are intended to pass on the death of the owner to a named beneficiary, are considered testamentary accounts and are insured as a form of individual account. If the beneficiary is a spouse, child or grand-child of the owner, the funds are insured for each owner up to a total of the maximum insured sum separately from any other individual accounts of the owner. In the case of a Revocable Trust Account, the person who holds the power of revocation is considered the owner of the funds in the account.



Answer: The account is insured as an account of the principal or true owner. The funds in the account are added to any other accounts owned by the owner and the total is insured up to the maximum sum.

Answer: Yes. If the Company or Partnership is engaged in an independent activity, its account is separately insured up to the maximum insured sum. The term Independent activity means any activity other than one directed solely at increasing insurance coverage.


Answer: Yes. In a situation where the amount of depositors’ fund in a closed bank exceeds the maximum insured amount, the owners of such accounts will share, on a pro-rata basis, in any proceeds from the liquidation of the bank’s assets with other general creditors, including the NDIC.


Yes. When acting as Liquidator of a closed institution, the NDIC is acting on behalf of all creditors of that institution and its obligation is to collect all loans promptly and efficiently along with other assets of the institution.

Answer: Purchase and Assumption (P&A) is a failure resolution mechanism which involves purchasing the assets of a failed bank and assuming its liabilities by another healthy insured bank(s).

Answer: Open Bank Assistance (OBA) is a situation where a failing insured institution is assisted to continue to operate in the same name on a going concern basis. It may involve change in ownership and management of the bank; injection of fresh funds in the form of equity and/or loan capital; and re-organisation and overhauling of the bank including rationalization of staff and branches.

Answer: Yes. To process such claims, a Letter of Administration and a Probate from a Court of Law would be required to be presented to NDIC in addition to all other documents which are to serve as proof of ownership of such account.

Answer: A bridge bank is a temporary bank established and operated usually by a deposit insurer to acquire the assets and assume the liabilities of a failed bank until a final resolution is accomplished. The bridge bank would permit continuity of banking services to all customers and fully protect all the depositors and creditors of the failed bank pending final resolution. A bridge bank is usually set up for a specified period of time within which the Deposit Insurer would find an interested investor.

Answer: The client of the defunct bank should contact the acquiring bank. In case of unresolved claims, contact NDIC through any of the channels provided in the answer to Question 67.

Answer: Announcements would be made through the media (television, radio, newspapers) and NDIC posters at the Head Office’s and branches of the closed banks as to when the payment of deposits would commence.


Answer: The depositor should contact NDIC through any of the channels provided in the answer to Question 67.


Answer: Payment Service Banks are deposit-taking financial institutions licensed by the CBN to carry out payments and remittance services through various channels including banking agents and mobile and electronic channels. They are to operate in rural and unbanked locations and are not permitted to grant any forms of loans/advances or trade in the foreign exchange market.

Answer: The NDIC undertakes supervision of insured institutions with the objective of protecting consumers. It established consumer protection desks in order to promptly respond to series of complaints it receives against banks and other financial institutions on a daily basis. This is achieved sometimes through the conduct of investigations by the NDIC Examiners.

Answer: The NDIC publishes and distributes books on deposit insurance and banking to enlighten the public. Recently, a book on basic knowledge on banking and deposit insurance was distributed to all secondary schools nation-wide with the aim of catching them young. The NDIC also undertook a study on financial literacy, the report of which was published in book form in order to facilitate readership within the banking public and to assist stakeholders address the challenges of financial literacy.


NDIC has set up the following contact channels to provide customer service to the public:
a) To obtain quick answers to your questions, call our Help Desk Line: 0800-6342-4357; and 09 – 460 – 1030.

b) You can also send comments to NDIC by mail to: The Managing Director/Chief Executive Officer, Nigeria Deposit Insurance Corporation, Plot 447/448 Constitution Avenue, Central Business District, Airport Road, P.M.B. 284, Garki, Abuja.
E-mail – info@ndic.gov.ng
c) Information on NDIC and the deposit insurance system can be accessed from our website at: www.ndic.gov.ng. You can also submit comments or questions through the web site. In addition you can reach us through our toll-free line: 080063424357 (0800NDICHELP).