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N500,000 Insurance On Bank Accounts Is Adequate, Says NDIC

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The Nigeria Deposit Insurance Corporation (NDIC) says N500,000 Maximum Insured Limit (MIL) on bank deposits is adequate and aligned with international best practices.

The Managing Director/Chief Executive, NDIC, Mr. Bello Hassan, said at the a workshop for Finance Correspondents and Business Editors held in Gombe.

He allayed fears over the adequacy of the NDIC’s maximum coverage limits of N500,000 per depositor per commercial, merchant and, non-interest bank, primary mortgage bank and mobile money operator, as well as N200,000 per depositor per microfinance bank.

Hassan said, ”I need to reiterate that, as it is today, these limits are not only adequate, they are also consistent with the extant provisions and recommendations of the International Association of Deposit Insurers (IADI) in its Core Principle for Effective Deposit Insurance System on the determination of coverage limits.

“The IADI Core Principle No. 8 on coverage limits specifically requires that the thresholds should be limited, credible with the capacity to fully cover substantial majority of bank depositors while the rest remain exposed to ensure market discipline. Deposit insurance coverage should also be consistent with the deposit insurance system’s public policy objective.

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“In addition, the coverage limits are not designed to be static but subject to periodic reviews to ensure that they are consistent with the public policy objectives of the Deposit Insurance System.

According to him, the corporation successfully reviewed upward the coverage limits from N50,000 at inception in 1989 to N200,000 in 2006 and N500,000 in 2010.

Hassan added, “In the same vein, the corporation invites you to note that in 2016, 2017, 2018 and 2019, the total number of accounts in the deposit money banks stood at 83.0 million; 99.1million; 112.0 million and 128.4 million respectively.

“Out of these numbers, the N500,000 coverage limit fully covered 99.4 percent; 97.6 percent; 97.5 percent and 97.6 percent of accounts, respectively. What these figures entail is that only less than 3 percent of accounts/depositors are not fully covered by the prevailing coverage limits.”

About Author

Ife Ogunfuwa is an award-winning reporter who is versed in reporting business and economy, technology, gadgets reviews, telecoms, tax, and business policy review, among others. She loves telling stories behind the numbers. She has professional certifications in business and financial reporting. You can reach her via – [email protected]

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