NDIC To Support Insured Financial Institutions – MD

NDIC To Support Insured Financial Institutions – MD

Mariam Sanni

The Nigeria Deposit Insurance Corporation (NDIC) has given it commitment to scale up Deposit insurance framework in order to provide timely and adequate support to insured institutions.

The Managing Director/Chief Executive Officer of  NDIC,  Bello Hassan disclosed this at the 19th edition of 2021 Finance Correspondents Association of Nigeria(FICAN)  Workshop in Ibadan, Oyo state.

He explained that this will ensure faster and orderly resolutions of liquidated insured financial institutions; as well as continue to assist the Central Bank in promoting the stability of the banking system.

 According to him, in the area of Deposit Insurance, as a key mandate of the Corporation, he said that the management has evolved a strategy which accentuates the existing framework.

He stated that the initiative, strives to ensure that the insurance cover is adequate to support the objective within the banking sector.

“Our key focus is therefore to scale up the deposit insurance framework; provide timely support to insured institutions as and when required; ensure faster and orderly resolutions of liquidated insured institutions; as well as continue to assist the Central Bank in promoting the stability of the banking system.

In addition, considering the importance of the optimum Funding Ratio in deposit insurance, we are developing an effective methodology for determining a realistic Target Funding Ratio for the Corporation. Additionally, we have commenced the review of our approach to the determination of premium by banks to make it more risk-based, such that, the probability of the risk crystallizing, becomes a major factor in the pricing methodology of our premium going forward.

We are equally collaborating with relevant stakeholders, to ensure that the Corporation discharges its responsibilities efficiently without hindrances, following revocation of licenses of any insured institution by the CBN,” he said.

Further speaking, he explained that FICAN workshop, has always been an important part of capacity building initiative for the media, towards ensuring their better understanding of the Corporation’s role in ensuring financial system stability.

Hassan explained that it is aimed at strengthening and broadening media ability to interrogate and interpret current developments in the financial services sector in general.

I am extremely delighted that in the Nineteen (19) years of this laudable engagement, the objectives of the workshop are continuously being met, judging by the knowledge imparted on participants, as demonstrated by the high quality of reportage that we read in the media on a daily basis.

He revealed that the choice of the theme of this year’s workshop: “Enduring Extreme Disruptions: Resilience & Reinvention for Banking System Stability & Deposit Insurance” was apt.

He added that as economies across the globe continue to grapple with the devastating impact of the COVID-19 Pandemic, it has become expedient and highly desirable, for supervisors to come up with appropriate strategies that are required to build resilience into our financial system as the Corporation seek to provide the much-needed support to the Federal Government’s economic recovery agenda.

He reiterated the determination of the current management of the NDIC, to work harmoniously with all stakeholders, to enhance the capacity of the Corporation in the discharge of its statutory obligations towards the fulfilment of the public policy objectives for which it was established.

Furthermore, there have been recent calls on the Corporation to enhance the provision of support, to insured institutions that are facing financial difficulties. To this end, we have identified the need to reconsider our framework, to provide realistic terms and conditions that will enable qualifying insured financial institution promptly access technical and or financial support, in line with S.(2)(1)(b) of the NDIC Act, whilst also protecting the Corporation from possible downside risks.

In all these collaborative efforts, the media, the civil society groups, along with the insured financial institutions that are represented at this workshop, will remain the most strategic and critical stakeholders that we cherish the most,” he noted.