James Emejo in Abuja

Managing Director/Chief Executive, Nigeria Deposit Insurance Corporation (NDIC), Dr. Oludare Sunday, yesterday advised Nigerians to stay away from banks and other financial institutions that are not licensed by the Central Bank of Nigeria (CBN).

He also said customers must not patronised any bank, fintech and payment services that are not covered by the NDIC as well as avoid ponzi schemes.

Sunday made the appeal in Abuja at the NDIC Special Day at the ongoing 20th Abuja International Trade Fair (AITF) with the theme, “Sustainability: Consumption, Incentives and Taxation”.

Represented by NDIC Director, Performance Management Department, Olabimpe Akande, he noted that the corporation had over three decades played a vital role in safeguarding depositors funds, particularly the most vulnerable, and fortifying the financial system.

He said the NDIC primary objectives included insuring deposits in licensed banks, supervising financial institutions, managing distressed banks, and ensuring a smooth resolution process in the event of bank failures.

The MD further reaffirmed its commitment to protecting Nigerians’ banks.

He said, “Furthermore, I would like to emphasise the importance for Nigerians to remain vigilant against Ponzi schemes and other fraudulent investment platforms. Always ensure your funds are placed only in Central Bank of Nigeria licensed banks, all of which are covered by deposit insurance provided by the NDIC. This vigilance is crucial to protecting your hard-earned savings.

“Despite the rapid growth and adoption of financial technology in our banking sector, traditional banks continue to play a vital role and regulatory frameworks have been strengthened to ensure the compliance and stability of all deposit-taking institutions in the country.”

He said currently, NDIC insures depositors of Deposit Money Banks (DMBs), Mobile Money Operators and Non-Interest Banks, up to a coverage limit of N5 million, adding that depositors of Payment Service Banks (PSBs) Microfinance Banks (MFBs) and Primary Mortgage Banks (PMBs) are insured up to N2 million.

According to him, the enhanced coverage ensures that about 98.98 per cent of total depositors in Deposit Money Banks, 99.27 per cent in microfinance banks, 99.34 per cent in Primary Mortgage Banks, and 99.99 per cent in Payment Service Banks are protected, reflecting NDIC’s unwavering commitment to fulfilling its mandate.

He pointed out that in partnership with the CBN, NDIC strives to maintain stability in the banking sector, enforce compliance with banking regulations, and exercise effective oversight over insured deposit-taking institutions.

Sunday said, “Our mission, embodied in the tagline ‘Protecting your bank deposits,’ is to promote financial inclusion and stability by reassuring Nigerians of the security of their savings.

Significant progress has been made in protecting depositors’ funds, notably through the increase in the maximum deposit insurance coverage, which has broadened protection across various licensed banks.”

Continuing, he said, “In the event that a bank fails, depositors with account balances exceeding the insured coverage limit receive an initial payment up to the maximum insured amount. Their remaining balances are then paid through liquidation dividends.

“Liquidation dividends refer to payouts made to depositors and creditors from the proceeds generated from the sale of a failed bank’s assets and recovered debts during the liquidation process. These dividends are usually paid on a pro-rata basis, meaning depositors receive a proportionate share of the recovered funds relative to their outstanding balances beyond the insured limit.

“An example of this process was the revocation of Heritage Bank’s license on June 3, 2024. The NDIC promptly reimbursed insured deposits using the Bank Verification Number (BVN) in collaboration with the Nigeria Inter-Bank Settlement System (NIBSS) as a unique identifier to locate alternate accounts for payment. Depositors with sums exceeding five million naira were first paid five million naira, with liquidation dividends disbursed subsequently from recovered assets and debts.

“The first tranche of liquidation dividends commenced on April 25, 2025, and payments continue, as the corporation continues to realise the sale of assets and recover debts demonstrating the NDIC’s effectiveness in ensuring comprehensive depositor protection and financial stability.

“This approach aligns with many successful liquidation cases where the NDIC continues to meet claims responsibly, reinforcing public confidence in the financial safety net.”

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