NDIC Flags Institutional Constraints Hindering Operations
…Seeks Closer Collaboration with CBN on Crisis Preparedness
By Patience Ikpeme
The Nigeria Deposit Insurance Corporation (NDIC) has drawn attention to what it calls “institutional constraints” impeding its ability to deliver on its core mandate of protecting depositors and ensuring the stability of Nigeria’s financial system.
Managing Director and Chief Executive of the NDIC, Mr. Thompson O. Sunday, identified two key issues affecting the Corporation’s operations. The first is the absence of a unique identifier such as the Bank Verification Number (BVN) for corporate customers, which hinders accurate depositor identification.
The second is the difficulty in collecting insurance premiums from insured institutions that do not maintain accounts with the Central Bank of Nigeria (CBN).
These issues, according to Mr. Sunday, present operational risks that must be addressed to strengthen the country’s deposit insurance framework.
He made these remarks during a courtesy call by the newly appointed Management of the NDIC, to the CBN Headquarters in Abuja on Wednesday.
In a statement released by Hawwau Gambo, Head of Communication and Public Affairs at the NDIC, the Corporation expressed readiness to work with the apex bank to bridge these gaps, which affect risk assessment, resolution planning, and premium collection.
The NDIC also appealed to the CBN to consider the development of a joint crisis preparedness framework to enhance coordinated responses to potential shocks in the banking sector. Mr. Sunday said such a framework would improve the financial system’s ability to respond proactively to distress scenarios and help build confidence among depositors.
He reaffirmed the NDIC’s commitment to deepening collaboration with the CBN on broader financial system stability, noting the critical role both institutions play in maintaining trust and safeguarding public funds. He also acknowledged the CBN’s ongoing support in premium collection from insured institutions as a step in the right direction.
Citing recent milestones, Mr. Sunday disclosed that the NDIC has paid ₦54.62 billion to 691,418 depositors of the defunct Heritage Bank. Within a year of the bank’s closure, the Corporation also declared a liquidation dividend of 9.2 kobo per naira to uninsured depositors. He said these outcomes reflect the NDIC’s growing capacity to handle bank failures promptly and fairly. He further revealed that the Corporation is working on a target funding framework to ensure sufficient reserves for future interventions.
Mr. Sunday acknowledged the efforts of the CBN Governor, Mr. Olayemi Cardoso, in implementing key reforms in the financial sector, including measures to stabilize the foreign exchange market and the ongoing recapitalization of Deposit Money Banks. He said the NDIC is aligning its operations with the NDIC Act 2023 (as amended) and has commenced a strategic restructuring initiative to better deliver on its risk minimization mandate. The Corporation is also in the process of developing a new corporate strategy to replace the current one, which expires at the end of the year.
In his remarks, CBN Governor Olayemi Cardoso described the NDIC’s visit as timely, adding that closer institutional coordination was vital given the economic challenges Nigeria is currently facing. He said the CBN counts on the NDIC’s partnership to ensure financial system stability and public trust in banking institutions.
Reflecting on his two years in office, Governor Cardoso stated that the experience has revealed critical lessons that require forward-looking strategies to manage systemic risks. He said both the CBN and the NDIC must embrace modern tools and collaborate more closely to navigate uncertainty in the financial landscape.
Also speaking at the meeting, Mrs. Rita Sike, Director of the CBN’s Financial Policy and Regulation Department, said the proposed joint crisis preparedness framework could be anchored under the Financial Services Regulation Coordinating Committee (FSRCC). She disclosed that the CBN was in the process of enhancing the Credit Risk Management System (CRMS) to integrate the Global Standing Instruction (GSI), which will allow Other Financial Institutions (OFIs) to be fully onboarded and improve the industry’s overall risk management practices.
