By Adeyemi David
The Nigeria Deposit Insurance Corporation has stepped up efforts to deepen public understanding of deposit insurance while reaffirming that depositor funds remain protected under its regulatory framework.
Managing Director of the corporation, Thompson Sunday, disclosed this at a stakeholders’ town hall meeting held on Saturday in Lagos.
The meeting, themed “Strengthening Depositor Confidence: NDIC’s Role in Financial System Stability and Consumer Protection,” focused on promoting awareness of the corporation’s operations and reinforcing trust in the financial system.
Sunday, represented by Mrs Adedayo Olukoya, Director of the Bank Examination Department, stressed that improved public knowledge of deposit insurance would enhance resilience within the financial sector.
The engagement brought together key financial stakeholders to discuss safeguards for depositors and strategies for sustaining system stability.
Also speaking, Olawale Sule, Director of the Claims Resolution Department, said the NDIC operates on four core mandates—deposit guarantee, banking supervision, failure resolution and bank liquidation.
“The corporation insures deposits in licensed banks to ensure customers do not lose their savings if a financial institution fails,” Sule said, noting that depositors do not pay premiums, as insured institutions contribute based on prescribed rates and risk assessments.
He explained that the NDIC guarantees payment of insured deposits up to the statutory limit when a bank becomes distressed and is eventually closed.
According to him, depositors in deposit money banks, non-interest banks and mobile money operators are covered up to N5 million, while customers of microfinance banks, primary mortgage institutions and payment service banks are insured up to N2 million.
Sule added that the corporation works closely with the Central Bank of Nigeria to monitor the health of financial institutions through routine supervision, including off-site surveillance and on-site examinations to verify financial conditions and regulatory compliance.
“This allows early detection of problems and timely intervention to prevent failure,” he said.
He noted that when banks show signs of distress, the NDIC may implement measures such as financial assistance, management changes, mergers or acquisition arrangements to stabilise institutions and protect depositors.
Where recovery efforts fail, the corporation proceeds with liquidation following licence revocation.
“In such cases, NDIC steps in as liquidator to identify assets and liabilities, settle depositors’ claims and recover funds owed to the bank,” Sule said, adding that depositors are given priority in the payment process.
“They are first paid the insured portion of their savings, while balances above the insured limit are reimbursed later as liquidation dividends when assets are realised,” he explained.
Sule also highlighted the importance of the Bank Verification Number, noting that it enables the corporation to trace depositors’ alternate accounts and credit insured funds promptly after a bank closure.
BVN linkage, he said, has significantly improved reimbursement speed, allowing many depositors to receive payments without filing physical claims.
Providing an overview of the engagement, Hawwua Gambo, Head of Communications and Public Affairs at NDIC, said recent developments in the banking sector had made sustained stakeholder engagement necessary to reinforce public confidence in deposit insurance.
She noted that the revocation of licences of some banks and subsequent reimbursement of depositors had heightened public interest in deposit safety and recapitalisation efforts.
While such regulatory actions are essential for financial stability, they have also created misconceptions and knowledge gaps among the public.
According to Gambo, proactive engagement remains critical for providing clarity, building trust and strengthening depositor confidence.
She added that findings from the corporation’s recent public awareness survey underscored the need to enhance interpersonal communication channels to improve public understanding of deposit insurance and banking operations.
