NDIC Moves to Boost Deposit Insurance Capacity
By Patience Ikpeme
The Nigeria Deposit Insurance Corporation (NDIC) has formally moved to strengthen its financial reserves, calling for an exemption from certain fiscal policies to better protect depositors from the impact of potential bank failures.
Mr. Thompson Oludare Sunday, the Managing Director and Chief Executive of the NDIC, made this appeal during a high-level consultation with Dr. Armstrong Takang, the Managing Director of the Ministry of Finance Incorporated (MOFI).
The visit, which took place on Tuesday in Abuja, marks a significant step in the Corporation’s strategic engagement with key partners following Mr. Sunday’s appointment in July 2025.
The Corporation currently operates under the Federal Government’s 50 per cent cost-to-income ratio policy, a mandate designed to ensure fiscal discipline across government agencies. While Mr. Sunday confirmed that the NDIC is in full compliance with this directive, he noted that the policy creates “operational constraints” that limit the growth of the Deposit Insurance Fund (DIF).
Building a robust fund is essential for the NDIC to fulfill its primary mandate: ensuring that depositors are reimbursed promptly if a financial institution collapses. Mr. Sunday pointed to global benchmarks established by the International Association of Deposit Insurers (IADI), which state that deposit insurers should maintain adequate funding to handle bank failures independently.
“International best practices under the Core Principles for Effective Deposit Insurance issued by the International Association of Deposit Insurers require deposit insurers to maintain adequate funds to reimburse depositors when banks fail without recourse to government,” Mr. Sunday explained. He added that seeking an exemption from the current cost-to-income restrictions is a proactive measure to “strengthen its capacity in this regard.”
Despite the plea for operational flexibility, the NDIC boss was quick to defend the Corporation’s record on financial accountability. He stated that the NDIC remains a leading institution in Nigeria’s financial safety-net, maintaining a “culture of compliance” with the Fiscal Responsibility Act (FRA) 2007.
The Corporation is required to remit either 20 per cent of its gross earnings or 80 per cent of its net surplus to the Federal Government. Mr. Sunday confirmed that these statutory obligations are met consistently and that the Corporation takes pride in submitting its financial statements well ahead of legal deadlines.
“Adherence to fiscal discipline remains central to NDIC’s credibility and effectiveness,” he said, noting that such transparency is vital for maintaining public confidence in the nation’s banking system.
Strengthening the Partnership with MOFI
The meeting served to reinforce the ties between the NDIC and the Ministry of Finance Incorporated, which holds a 40 per cent equity stake in the Corporation on behalf of the Federal Government. Mr. Sunday described MOFI as a “critical stakeholder,” stating that sustained collaboration is necessary to balance the Corporation’s regulatory duties with its financial obligations to the state.
Responding to the presentation, Dr. Armstrong Takang praised the NDIC for what he described as an “exemplary collaborative spirit.” He acknowledged the Corporation’s track record of compliance and pledged that MOFI would continue to facilitate discussions with the Federal Ministry of Finance regarding the NDIC’s unique funding requirements.
Dr. Takang agreed that a “strong NDIC is vital to sustaining confidence in Nigeria’s financial system,” signaling a willingness to support the Corporation’s quest for a more flexible financial framework.
The statement, issued by Hawwau Gambo, Head of the Communication and Public Affairs Department, concluded by noting that both leaders remain focused on a shared goal: a transparent, accountable, and stable financial environment that places the protection of depositors at the forefront of the national interest.
