50% Remittance To Govt Coffers Limiting Our Ability To Grow Deposit Insurance Fund—NDIC
The Nigeria Deposit Insurance Corporation (NDIC) has disclosed that the mandatory remittance of 50 per cent of its earnings to government coffers is constraining its ability to adequately build the Deposit Insurance Fund needed to effectively respond to bank failures.
The Managing Director/Chief Executive of the Corporation, Mr. Thompson Sunday, made this known during a courtesy visit to the Managing Director/Chief Executive of the Ministry of Finance Incorporated (MOFI), Dr. Armstrong Takang, as part of NDIC’s post-assumption engagement with key stakeholders following his appointment in July 2025.
Sunday reaffirmed NDIC’s strict adherence to fiscal and financial regulations, including the provisions of the Fiscal Responsibility Act (FRA) 2007, stressing that the Corporation has consistently remitted the required proportion of its earnings to the Federal Government.
He noted that NDIC fully complies with statutory obligations, including the payment of 20 per cent of gross earnings or 80 per cent of net surplus, as applicable, while also submitting its financial statements ahead of statutory deadlines.
According to him, NDIC’s culture of compliance underscores its role as a critical institution within Nigeria’s financial safety net, tasked with protecting depositors and sustaining confidence in the banking system.
He added that fiscal discipline remains central to the Corporation’s credibility and effectiveness.
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However, Sunday explained that compliance with the Federal Government’s 50 per cent cost-to-income ratio policy has placed operational constraints on the Corporation.
He said the deductions significantly affect NDIC’s capacity to build a robust Deposit Insurance Fund required to reimburse depositors promptly in the event of bank failures.
He noted that international best practices, as outlined in the Core Principles for Effective Deposit Insurance issued by the International Association of Deposit Insurers (IADI), require deposit insurers to maintain sufficient funds to protect depositors without recourse to government intervention.
In this regard, he disclosed that NDIC is seeking an exemption from the policy to strengthen its financial capacity.
Sunday described MOFI as a key stakeholder, noting that the Federal Government, through MOFI, holds a 40 per cent equity stake in NDIC.
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He emphasized that sustained collaboration with MOFI is crucial to enabling the Corporation to meet its obligations to government while effectively safeguarding depositors’ funds.
In his response, Takang commended NDIC for its strong collaborative approach and acknowledged its consistent compliance with fiscal regulations.
He assured that MOFI would continue to engage the Federal Ministry of Finance on NDIC’s behalf, stressing that a strong and well-funded NDIC is essential for maintaining confidence in Nigeria’s financial system.
