NDIC Pledges Commitment to Stability in Financial Sector

The Nigeria Deposit Insurance Corporation (NDIC) on Friday restated its commitment to ensuring financial system stability in the country.

Mr Adedapo Adeleke, it’s Director of Banking Examination Department, reaffirmed the commitment at the ongoing workshop for financial correspondents in Kaduna.

Adeleke, who delivered a paper on “Refocusing Banking Supervision in Nigeria in an Era of Economic Recession”, said that it was imperative for the country to do the needful to come out of recession.

According to him, NDIC and the Central Bank of Nigeria (CBN) are relaxing some prudential requirements used to regulate the banks and directly intervening in needing institutions.

He said that this was the focus of some counter-cyclical measures considered appropriate to guarantee financial system stability given the magnitude of macro-economic stress.

The NDIC director said that some of the proactive measures being implemented by the supervisory authorities were to decouple financial conglomerates, known as universal banks, and this had helped to reduce the contagion of risk.

Adeleke said that other measures included capital adequacy ratio which the regulatory authorities set above the Basel Committee thresholds of eight per cent and 10 per cent to16 per cent.

According to him, this has created default capital buffer and therefore serves as allowance during the period of stress.

Another measure, he said, was stress testing which banks had been put through various capital and liquidity tests which included computation of requirements under Basel II.

Adeleke said the risk supervision measure was taken by the authorities as a safety net to guarantee depositors for redemption.

He promised that the NDIC would continue to take measures to boost confidence in the financial system.