.Reaches advanced stage in review of maximum deposits insurance
Nigeria Deposit Insurance Corporation (NDIC) has backed the Central Bank of Nigeria’s (CBN) proposed recapitalisation of banks, saying the nation is in dire need of bigger banks to achieve the vision of a $1 trillion economy by 2030.
Managing Director of NDIC, Mr. Bello Hassan, stated this in Owerri, Imo State capital while addressing journalists on the sideline of the 20th edition workshop for Business Editors and Members of Finance Correspondents Association of Nigeria (FICAN), organised by the corporation.
The workshop is themed, “Stocktaking of Deposit Insurance Practice: Assessing the Now, Evaluating the Challenges and Forecasting the Future”.
According to Mr. Hassan, while the banking industry is sound in terms of key indicators namely capital adequacy, liquidity, earnings and quality of assets, achieving a $1 trillion economy requires bigger banks.
He said, “If you look at the performance of the industry, it is very sound, looking at the key financial soundness indicators, capital adequacy, liquidity, earnings, and quality of assets.
“But, certainly, the government is trying to grow our Gross Domestic Product (GDP) to $1 trillion, we also need bigger banks to play in that space.
“As the government is trying to implement their agenda of growing the GDP to $1 trillion we also need bigger banks to achieve that. I believe it is within that context that the CBN is recapitalising the banks, asking the banks to recpitalise, to enhance their capital,” he said.
Earlier in his opening remarks, the NDIC boss said the corporation has reached an advanced stage in the review of the maximum deposit insurance coverage to account for the impact of macroeconomic developments, since its last review.
He said “It is our belief that the new coverage level once approved will go a long way in reinforcing
depositors’confidence on the NDIC’s deposit guarantee scheme.
He also stated that the corporation has introduced the Single Customer View (SCV) framework that has enhanced speedy payment of insured sums to depositors of closed banks.
Mr. Hassan stated that NDIC currently has enhanced collaboration with the bar and the bench, which has led to speedy dispensation of justice and more informed judgements on failed banks cases.
According to him, NDIC has equally put in place policy and framework on Alternative Dispute Resolution for out-of-court settlement, which had enabled the corporation to resolve some hitherto protracted failed bank litigations.
“We have reviewed the Framework for Differential Premium Assessment System (DPAS) to make it more risk sensitive and account for significant developments that have taken place in the Nigerian banking system since its adoption in 2008 and we have established a special desk at the Economic and Financial Crimes Commission (EFCC) which has energized investigation and prosecution of parties responsible for failure of
banks.
“In complementing the consumer protection efforts of the CBN, we have
enhanced public awareness on the benefits and limitations of the deposit
insurance system and financial literacy,to reduce the rate at which small depositors are being defrauded, thereby enhancing confidence in the
banking system.
“We have invigorated our liquidation activities, and greatly increased debt recovery rate leading to declaration of 100 per cent liquidation dividends to depositors of over 20 deposit money banks in liquidation.
“And we have also improved our systems, processes and procedures to promote transparency and accountability in our operations,
amongst other humble achievements,” he said .
