From Uche Usim, Abuja
To underscore the relevance of deposit insurance in stabilising the financial system, the Nigeria Deposit Insurance Corporation (NDIC) says its liquidation activities from inception involve 467 insured banks, comprising 49 Deposit Money Banks (DMBs), 367 Micro Finance Banks (MFBs), and 51 Primary Mortgage Banks (PMBs) as at December 31, 2021.
NDIC Managing Director Mr Bello Hassan, who made the disclosure in Abuja on Tuesday at the International Association of Deposit Insurers (IADI) Africa Regional Committee (ARC) workshop, said the feat would not have been possible without the strong support and collaborative efforts of other financial safety-net players in Nigeria like the Central Bank of Nigeria (CBN), the Federal Ministry of Finance, Budget and National Planning and others.
Hassan called for a system-wide approach that will involve collaborative efforts of financial safety-net participants and regional deposit insurance systems in managing crises in the insurance sector.
Earlier in her remarks, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, hailed the CBN and NDIC for keeping Nigeria’s economy resilient despite ferocious local and global headwinds.
She acknowledged that while the Nigerian economy succumbed to global tremors by slipping into recession twice in quick succession, the resilience of the nation’s financial system towed it out of the doldrums quickly
She said the fiduciary nature of the banking business, coupled with increased social-economic challenges across the globe, had increased the risk of banks’ failure, with significant implications for depositors’ losses and erosion of public confidence in the banking system.
In his address at the programme, the CBN Governor, Mr Godwin Emefiele noted that the COVID-19 pandemic underscored the need for countries to prepare against financial crises and ensure that, proactive mechanisms are put in place to deal with crises, even before the underlying risks crystallises.
“This view, to my mind, remains fundamental to the thinking of regulators and supervisors in the global financial market.
“The Central Bank of Nigeria (CBN) is therefore proud to be associated with this workshop because of our firm belief that, it would provide a platform for brilliant ideas and experience-sharing, especially of the four-dimensional shocks that are shaping the current global economies and that of Nigeria with obvious linkages to the safety and soundness of the banking systems and role of deposit insurance. It is my belief that these shared experiences would be of immense benefit to, not only the participating countries here but the entire global deposit insurance system”, he said.
In her remarks, NDIC Board Chair Mrs Ronke Sokefun said the workshop was organized by NDIC to serve as a forum to dissect pertinent issues, share experiences, compare notes and elevate participants’ understanding of the role of deposit insurers in early detection & timely intervention; contingency planning & crisis management; crisis simulation to strengthen operational resilience; and contingency planning framework for a safer, and more resilient financial system, that is supportive of sustainable economic growth in each jurisdiction.