The Nigeria Deposit Insurance Corporation (NDIC) says it has granted approval for an upward review of its Maximum Deposit Insurance Coverage (MDIC) from N200,000 to N500,000 per depositor for Primary Mortgage Banks (PMBs).
A statement by the Head, Communication and Public affairs of NDIC, Mr Hadi Birchi, on Sunday, said that the Differential Premium Assessment System (DPAS) to the PMBs was also extended.
Birchi said the approval was granted by the Minister of Finance, Mrs Kemi Adeosun, in a letter dated Aug. 4.
He said the letter emphasised the need for the Corporation to ensure that all the DMBs, PMBs and MFBs strictly adhered to sound risk management practices.
“They are also expected to entrench compliance to the CBN approved code of corporate governance standards,” he stated.
According to him, the NDIC’s Board is empowered by Section 20 (2) of the NDIC Act 2006 to periodically review the MDIC for licensed banks and other deposit taking financial institutions.
The News Agency of Nigeria (NAN) reports that the review was in accordance with changes in deposit structure, income levels and in line with global best practices.
“The MDIC review is carried out through studies and surveys and is aimed at ascertaining the adequacy or otherwise of the deposit insurance coverage level for insured institutions in Nigeria.
“The outcome of the most recent survey conducted in August, 2015, revealed the compelling need for the upward review of the current MDIC for PMBs from N200,000 to N500,000 per depositor.
“The survey also revealed that the MDIC increase would cover 99 per cent of depositors of the PMBs in Nigeria.’’
The spokesman explained that the adoption of DPAS in assessing the annual premium payable by PMBs would promote better risk management in the banks in line with international best practises.
Besides, he said that currently, over 120 countries across the globe have adopted DPAs as an objective method of insurance premium pricing.