Deposit Insurers will have to pay more for license cover in their operations in a new policy set by the Nigeria Deposit Insurance Corporation (NDIC).
Speaking at a press briefing in Abuja on Thursday, the NDIC Managing Director/Chief Executive, Bello Hassan, said the coverage ensures that depositors will be reimbursed up to a certain limit for their deposits in the event of a bank failure.
According to him, the increment applies to Deposit Money Banks (DMBs), Microfinance Banks (MFBs), Primary Mortgage Banks (PMBs), Payment Service Banks (PSBs) and Mobile Money Operators (MMOs)
The NDIC boss said by increasing deposit insurance coverage, the corporation is ensuring that the move will strengthen the banking system and encourage further financial inclusion within the country.
Hassan said the increased deposit insurance coverage levels will take effect immediately, offering Nigerians greater peace of mind when saving their money with licensed financial institutions.
He said: “Key increases in Deposit Insurance Coverage: Deposit Money Banks (DMBs) coverage has jumped from N500,000 to N5,000,000, providing full coverage for 98.98 per cent of depositors compared to the previous 89.20 per cent.
“Microfinance Banks (MFBs) coverage has risen from N200,000 to N2,000,000, offering full coverage for 99.27 per cent of depositors (up from 98.76 per cent) and significantly increasing the value of covered deposits (from 14.38 per cent to 34.43 per cent of total deposits).
“For Primary Mortgage Banks (PMBs), the maximum coverage has been raised from N500,000 to N2,000,000, ensuring full coverage for 99.34 per cent of depositors (up from 97.98 per cent) and boosting the value of covered deposits (from 10.77 per cent to 21.04 per cent of total deposits).
“Payment Service Banks (PSBs) coverage has been increased from N500,000 to N2,000,000, providing near-complete protection (99.99 per cent) for depositors and raising the value of covered deposits to 43.10 per cent of the total (from 40.60 per cent).
“For Mobile Money Operators (MMOs), the maximum Pass-through deposit insurance coverage has been raised to N5,000,000 per subscriber per MMO, aligning it with the coverage level for DMBs.
“Deposit insurance coverage levels for all licensed deposit-taking financial institutions refer to the amount of protection provided to depositors in deposit-taking financial institutions in case the financial institution fails or goes bankrupt.”
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