The Nigeria Deposit Insurance Corporation (NDIC) has made a groundbreaking move by significantly raising the maximum deposit insurance coverage for bank depositors. This adjustment, announced on Thursday, marks a substantial increase of 900 percent, raising the coverage from N500,000 to N5 million. According to Bello Hassan, the Managing Director/CEO of NDIC, this increase will provide full coverage for nearly 99 percent of total depositors, compared to the previous coverage of 89.20 percent. Moreover, in terms of the value of deposits covered, the revised coverage will escalate to 25.37 percent, a significant surge from the current 6.31 percent.
In addition to the boost in coverage for banks, Microfinance Banks (MFBs) will also witness a significant rise in their maximum deposit insurance coverage. The NDIC announced an increase from N200,000 to N2,000,000, representing a substantial improvement that will now offer full coverage for approximately 99.27 percent of total depositors, compared to the existing level of 98.76 percent. Furthermore, the value of deposits covered by insurance will see a notable increase to 34.43 percent from the current 14.38 percent of the total value of deposits.
This move by the NDIC is poised to have a profound impact on the banking sector, as it enhances depositor confidence and bolsters financial stability. With the increased coverage, depositors can rest assured that a larger portion of their deposits is safeguarded, thereby mitigating risks associated with banking operations.
