UPDATED: Depositors Of Failed Banks To Get More As NDIC Increases Deposit Insurance Coverage From N500,000 To N5m

The Nigerian Insurance Deposit Corporation on Thursday announced an increase in the maximum deposit insurance coverage for Deposit Money Banks from N500,000 to N5m.

Deposit insurance is the government’s guarantee that an account holder’s money at an insured bank is safe up to a certain amount.

The Managing Director of NDIC,Hassan Bello who made the announcement said the move is in line with the Corporation’s commitment to enhancing depositors’ protection, public confidence, financial inclusion, and stability of the financial system.

For Deposit Money Banks (DMBs), Bello said the NDIC approve an increase of the maximum deposit insurance coverage from N500,000 to N5,000,000, noting that this would provide full coverage of 98 98 per cent of the total depositors compared with the current cover of 89.20 per cent.

In terms of the value of deposit covered, he said the revised coverage would increase the value of deposits covered by deposit insurance to 25.37 per cent compared with the current cover of 6.31 per cent of total value of deposits.

For Microfinance Banks (MFBs), Bello said the NDIC approved an increase of the maximum deposit insurance coverage from N200,000 to N2,000,000.

He noted that this would provide full coverage of 99.27 per cent of the total depositors compared with the current level of 98.76 per cent and would increase the value of deposits covered by deposit insurance to 34.43 per cent compared with 14.38 per cent of total value of deposit, currently covered

Primary Mortgage Banks (PMBs), he added would see an increase of the maximum deposit insurance coverage from N500,000 to N2,000,000, and this would provide full coverage of 99.34 per cent of the total depositors compared with the current 97.98 per cent.

He added that the move would increase the value of deposits covered by deposit insurance to 21.04 per cent compared with 10.77 per cent of total value of deposit, currently covered.

For Payment Service Banks (PSBs), the NDIC approved an increase of the maximum deposit insurance coverage from N500,000 to N2,000,000 and this would provide full coverage of 99.99 per cent of the total number of depositors.

It would also increase the value of deposits covered by deposit insurance to 43.10 per cent of the total value deposits from the current cover of 40.60 per cent.

For subscribers of Mobile Money Operators, the NDIC approved an increase of the maximum Pass-through deposit insurance coverage from N500,000 to N5,000,000 per subscriber per MMO as the applicable coverage level for depositors of DMBs.