The Nigeria Deposit Insurance Corporation (NDIC) has raised its Maximum Deposit Insurance coverage of Deposit Money Banks (DMBs) from N500,000 to N5 million.

The increase was announced by the Managing Director of the NDIC, Mr. Bello Hassan, at a press conference, Thursday in Abuja .

Mr. Hassan said Primary Mortgage Banks’ coverage was raised from N500, 000 to N5 million, Payment Service Banks had theirs’ increased from N500, 000 to N5 million, while the coverage of Subscribers of Mobile Money Operators coverage was also raised from N500, 000 to N5 million.

In addition, for Microfinance Banks, their Maximum Deposit Insurance coverage has been increased from N200, 000 to N2 million.

The MD said the NDIC has a war chest of Deposit Fund in excess of N2 trillion with which to implement the policy, meant to boost depositor’s confidence and stability of the nation’s banking system.

He said that the decision to raise the coverage levels was taken by the Interim Management Committee of the NDIC during its 18th meeting held last week, following a 2023 study of the organisation, to determine the adequacy of the Maximum Deposit Insurance Coverage in the country.

“NDIC’s Interim Management Committee (IMC), during its 18th meeting held on April 24th and 25th, approved an increase in the maximum deposit insurance coverage levels for all licensed deposit-taking financial institutions with immediate effect. The adjustments are as follows: Deposit Money Banks (DMBs): The increase of the maximum deposit insurance coverage from N500,000 to N5,000,000, would provide full coverage of 98.98% of the total depositors compared with the current cover of 89.20%.

“In terms of the value of deposit covered, the revised coverage would increase the value of deposits covered by deposit insurance to 25.37% compared with the current cover of 6.31% of total value of deposits.

“Microfinance Banks (MFBs): The increase of the maximum deposit insurance coverage from N200,000 to N2,000,000, would provide full coverage of 99.27% of the total depositors compared with the current level of 98.76% and would increase the value of deposits covered by deposit insurance to 34.43% compared with 14.38% of total value of deposit, currently covered.

“Primary Mortgage Banks (PMBs): The increase of the maximum deposit insurance coverage from N500,000 to N2,000,000 would provide full coverage of 99.34% of the total depositors compared with the current 97.98% and would increase the value of deposits covered by deposit insurance to 21.04% compared with 10.77% of total value of deposit, currently covered.

“Payment Service Banks (PSBs): The increase of the maximum deposit insurance coverage from N500,000 to N2,000,000 would provide full coverage of 99.99% of the total number of depositors and would increase the value of deposits covered by deposit insurance to 43.10% of the total value deposits from the current cover of 40.60%.

“Subscribers of Mobile Money Operators: The increase of the maximum Pass-through deposit insurance coverage from N500,000 to N5,000,000 per subscriber per MMO as the applicable coverage level for depositors of DMBs.”

The MD said the maximum deposit insurance coverage was determined through periodic research based studies, to ensure its adequacy and credibility and that various factors considered in setting the coverage level were: deposit distribution, impact of inflation, per capita GDP, exchange rate and other statistical models, among others.

Mr. Hassan said that his organization was committed to enhancing depositors’ protection, public confidence, financial inclusion, and stability of the financial system.

He however, warned members of the public to avoid unlicensed deposit-taking institutions, as such organisations had no insurance and that such deposit could be in danger.

The MD advised members of the public to verify deposit-taking organisations from the websites of the NDIC and Central Bank of Nigeria, to avoid becoming victims of fraudsters.