By Babajide Komolafe

The federal government has approved the upward review of the Maximum Deposit Insurance Coverage (MDIC) per depositor of mortgage banks to N500, 000 from N200, 000.
Managing Director/Chief Executive, Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umaru Ibrahim disclosed Monday in Lagos.

He spoke during the NDIC special day at the ongoing Lagos International Trade Fair. He said: “The Honourable Minister of Finance has approved an upward review of the deposit insured limit for depositors of PMBs to N500, 000 in order to ensure coverage of over 90 percent of depositors in the banking sub sector.”

Highlighting the contributions of the NDIC to the safety of the financial system, Ibrahim said: “As one of the three pillars of financial safety-net, the corporation has been protecting the interest of depositors by ensuring the safety of their bank deposits. “It is apt to reiterate the NDIC’s efforts over the years by putting depositors as its top priority. “The maximum deposit insurance coverage per depositor per bank has progressively increased from N50, 000 in 1989 to its current N500,000 per depositor per Deposit Money Bank (DMB). Similarly the insured limit for micro finance banks (MFBs) and primary mortgage banks (PMBs) in 2009 was increased from N100,000 to N200,000 per depositor per MFBs/PMB in 2010.

“Following the CBN’s licensing of non-interest banking institutions (NIBIs) and 21 mobile money operators (MMOs), the corporation equally extended deposit insurance coverage to the subscribers of these banking products to the limit of N500, 000 per depositor. In addition, the corporation developed frameworks of Pass-Through Deposit Insurance Scheme (PTDIS) and Non Interest Deposit Insurance scheme (NIDIS) to MMOs and non-interest banks’ subscribers respectively with maximum insured limit of N500,000 per subscriber. It is however pertinent to point out that depositors who have funds in excess of the insured limit are entitled to liquidation dividend after recovery of debts and sale of physical assets of closed banks.

Represented by the Director, Claims Resolution Department, Mr. A. S Bello, Ibrahim used the occasion to warn members of the banking public against patronage of illegal funds managers also known as ‘wonder banks’. He said: “I wish to sound a word of caution to members of the public on the activities of illegal fund managers, otherwise known as “Wonder Banks”. It is worrisome to note that despite repeated advice, many unsuspecting members of the public are still falling victims to the mouth watering interest being offered by these illegal funds managers. Once again,

I must sound a word of warning that those who these patronize illegal funds managers are doing so at their own risk. For avoidance of doubt, these illegal funds managers or ‘wonder banks’ are neither licensed by Central Bank of Nigeria (CBN) nor under the NDIC deposit insurance coverage.”

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