NDIC Assures Banks’ Customers Safety of their Deposit

Nigeria Deposit Insurance Corporation (NDIC) said its safety net coverage has reached 98 per cent of the customers of the Deposit Money Banks (DMBs).

Besides, it gave assurance that it has no course to rescue any bank from financial crisis after the incidence of the bridged banks that are now being put up for sale.

Mohammed Y. Umar, deputy director, Banking Examination, NDIC, , who made the disclosure at the sensitization seminar it organised for corps members at the National Youth Service Corps Orientation (NYSC) Camp in Sagamu, Ogun State, added that 98 per cent of deposits in banks are however, less than N500,000.

He noted that it was only two per cent of deposits in banks that are not currently covered by the corporation.

Umar, while explaining to corps members the major causes of liquidation of banks, he noted that the most dominant ones include operational risks, which has to do with systems, people, processes and external events.

“Internally, it could be a bank’ s lack of adequate capital. Inadequate capital will make a bank not to be able to operate and make profit and banks need to plough back earnings to grow. If a bank cannot grow, it will have liquidity issues and once such exists, there will be a run and no bank can survive a run on it,” he said.

He said that the senitization was very important because corps members are critical change agents, as most of them would be posted to the communities to serve and they will be interacting with the villagers.

He noted that corps members are just are just starting life, hence they too should know how to save for future purposes.

According to him, if corps were properly educated, they can easily tell the people in the village how safe their deposits are in the banks, which would encourage more people to open bank accounts and access financial services.

He pointed out that the corporation was using the senitization programme to drive financial inclusion as well.

“We also want the corps members to know how the financial services sector work so they can educate others. A lot of people are ignorant of banking services and are afraid that their deposits would be lost due to collapse of banks.

“There is nobody that has a claim in NDIC that we have not paid. The issue of deposit insurer is accepted worldwide, but low awareness about the value of deposit insurer is still key because they are only relevant when banks collapse,” he said.

 Umar lamented that when people go to bank and withdraw their money, they do not really care if NDIC exists or not, but start looking for NDIC when they have problem with their banks.