The Nigeria Deposit Insurance Corporation (NDIC) has increased the deposit insurance coverage for Primary Mortgage Banks (PMBs) by 150 per cent to N500,000.
The coverage figure, previously at N200,000, was raised to N500,000 to stimulate the confidence and patronage of mortgage customers.
NDIC Managing Director, Umaru Ibrahim who disclosed this in Lagos, said the corporation will continue to review its deposit insurance coverage for depositors of PMBs in the event of failure.
“The current coverage level represents an increase of 150 per cent over the earlier level of N200,000. Thus, the gap of the coverage between the commercial banks and PMBs is now bridged with the envisaged increase in patronage of PMBs,” he said.
Speaking at the 2016 sensitisation workshop for PMBs’ operators, he said the corporation’s records showed that 15 out of 42 PMBs are yet to meet their premium payment obligations to the corporation. He urged the affected operators to promptly pay their premium to the corporation in line with regulatory guidelines.
Meanwhile, the NDIC yesterday in Kano urged depositors who lost their money in liquidated banks to file for claims through the zonal offices of the corporation or any of the 10 banks appointed for the payment across the nation.
Ibrahim who spoke through the Director, Assets Management at NDIC, Alhaji Bashir Umar at NDIC Special Day at the ongoing 37th Kano International Trade Fair named the appointed banks to include First Bank of Nigeria, United Bank for Africa, Zenith Bank, Wema Bank, Heritage Bank, Union Bank, Fidelity Bank, Skye Bank, Unity Bank and Diamond Bank.
He lamented the activities of ‘Wonder Banks,’ just as he warned members of the public to be wary and desist from patronising banks which he described as fraudulent.
“I wish to sound a note of caution to discerning members of the public to beware and avoid any contact with these fraudsters as many unsuspecting public are still falling victims to the mouth-watering offers of quick returns. Members of the public are therefore advised to patronise insured banking institutions that display NDIC stickers in their banking halls or entrances,” Ibrahim said.
He said the corporation has the capacity to sustain its efforts in ensuring that insured institutions are put on the part of sustainable growth and development, adding that it is an exercise that would depend largely of premium contribution.
The corporation, he said, has also deployed the Differential Premium Assessment System (DPAS) in pricing the deposit premium of PMBs.
He said the DPAS centres on strong Enterprise Risk Management Framework (ERMF) and classifies banks into various risk buckets and apply different premium rates depending on the level of risk involved.
He said the DPAS will mitigate insurable risks for PMBs as well as encourage effective enterprise risk management.
According to him, the ERMF would include sound strategic planning and transformative business model and addresses the issue of moral hazard which guarantees caution and avoidance of excessive risk taking in running a PMB.
Ibrahim said: “To the operators in particular, the risk-based premium system allows the institution to pay much less premium than would have been the case, had the alternative, flat rate system had been adopted.
The NDIC boss said the corporation is the sole agency empowered to guarantee depositors’ funds in the deposit-taking financial institutions.
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