The Nigeria Deposit Insurance coverage Company (NDIC) has warned that the Federal Authorities’s necessary fiscal deductions are constraining the Company’s means to construct a strong Deposit Insurance coverage Fund (DIF).
In keeping with the Managing Director/Chief Govt of the company, Mr. Thompson Oludare Sunday, the necessary 50% cost-to-income coverage is constraining the Company’s means to construct a strong Deposit Insurance coverage Fund required to safeguard bank depositors throughout failures.
This a lot was revealed throughout a courtesy go to to the Managing Director/Chief Govt of the Ministry of Finance Integrated (MOFI), Dr. Armstrong Takang.
Mr. Sunday mentioned NDIC stays totally compliant with all statutory monetary and monetary rules, together with the Fiscal Duty Act (FRA) 2007.
Sunday pressured that worldwide benchmarks underneath the Worldwide Affiliation of Deposit Insurers (IADI) require deposit insurers to keep sufficient funds to reimburse depositors with out counting on authorities.
“These deductions have an effect on NDIC’s means to construct a powerful Deposit Insurance coverage Fund, which is required to reply successfully when banks fail,” he mentioned, including that NDIC is looking for exemption to boost its readiness for potential bank misery.
What NDIC is saying
The Company is looking for exemption from Federal Authorities’s necessary fiscal deductions, significantly the 50% cost-to-income coverage. In an announcement on Tuesday signed by Hawwau Gambo, Head, Communications & Public Affairs, Mr. Sunday was quoted as saying that the necessary remittances are limiting its operational flexibility and weakening its means to construct a strong Deposit Insurance coverage Fund (DIF).
In keeping with the assertion, these obligatory deductions scale back the funds obtainable for strengthening the DIF, which is important to NDIC’s capability to successfully defend depositors and reply swiftly within the occasion of bank failures.
The NDIC Managing Director emphasised that worldwide finest practices underneath the Worldwide Affiliation of Deposit Insurers (IADI) require deposit insurers to take care of enough monetary sources to reimburse depositors with out relying on authorities intervention.
He famous that the present deductions undermine this goal, prompting NDIC to hunt exemption from such remittances to boost its preparedness and resilience towards potential banking sector misery.
Nonetheless, Sunday reaffirmed NDIC’s strict adherence to statutory remittance obligations, together with the cost of 20% of gross earnings or 80% of internet surplus to the Federal Authorities, relying on the relevant rule.
He additionally famous that NDIC constantly submits its monetary statements forward of statutory timelines and operates inside the Federal Authorities’s fiscal self-discipline framework.
“This tradition of compliance is central to our credibility as a key establishment inside Nigeria’s monetary safety-net,” he said.
MOFI acknowledges NDIC’s compliance, pledges institutional assist
Responding, MOFI’s Chief Govt, Dr. Armstrong Takang, recommended NDIC for what he described as an exemplary file of collaboration, transparency, and monetary accountability.
He assured that MOFI—representing the Federal Authorities’s 40% fairness stake in NDIC—would proceed to have interaction the Ministry of Finance on the Company’s considerations.
Takang emphasised {that a} stronger NDIC is important to safeguarding depositor confidence and broader monetary system stability, pledging institutional assist to make sure the Company can successfully fulfil its mandate.
Strategic partnership for monetary stability
Each companies reaffirmed their dedication to sustained cooperation and transparency, with Mr. Sunday emphasizing that NDIC stays centered on balancing regulatory compliance with its overriding mandate of depositor safety and monetary system stability.
He described MOFI as a strategic companion whose sustained engagement is important to making sure NDIC continues to fulfill fiscal obligations with out compromising its core perform of sustaining confidence in Nigeria’s banking system.
What it is best to know
Deposit Insurance coverage Premium is a statutory cost by deposit-taking banks that ensures that NDIC, as an insurer, ensures the cost of deposits as much as the utmost restrict (Now N5 million) in accordance with its statute within the occasion of failure of an insured monetary establishment.
Nigerian banks spend enormous sums of cash to fulfill this obligation of necessary regulatory levies, together with statutory Property Administration Company of Nigeria (AMCON) levies.
In Q1 2025 alone, 10 main banks have been reported to have paid roughly N377.85 billion in mixed AMCON and NDIC expenses, with AMCON levies accounting for N283.85 billion and NDIC deposit insurance coverage premiums making up N93.99 billion of that quantity.