In a significant development for depositors in Nigeria, the Nigeria Deposit Insurance Corporation (NDIC) has announced an increase in the maximum deposit insurance coverage for various financial institutions licensed by the Central Bank of Nigeria (CBN).
This change is effective immediately and aims to bolster public confidence and financial stability.
The revised coverage levels are as follows:
- Deposit Money Banks (DMBs): Increased from N500,000 to N5,000,000
- Microfinance Banks (MFBs): Increased from N200,000 to N2,000,000
- Primary Mortgage Banks (PMBs): Increased from N500,000 to N2,000,000
- Payment Service Banks (PSBs): Increased from N500,000 to N2,000,000
- Mobile Money Operators (MMOs): Increased from N500,000 to N5,000,000 per subscriber
Mr. Bello Hassan, MD/CEO of NDIC, announced this during a press conference in Abuja. He explained that the decision was made to enhance depositor protection, promote financial inclusion, and ensure the stability of the financial system.
This revision aligns with the International Association of Deposit Insurers (IADI) Core Principles, which recommend periodic reviews of deposit insurance coverage to maintain credibility and prevent bank runs while leaving a substantial amount of deposits exposed to market discipline.
The last review was conducted in 2016, making this update necessary due to factors such as inflation, per capita GDP, and exchange rates.
The new coverage levels now protect 98.98% of total depositors and 25.37% of total deposits for DMBs, and 99.27% of total depositors and 34.43% of total deposits for MFBs.
