NDIC moves beyond Bank failure response, targets faster depositor protection

By Onu Okorie

Nigeria Deposit Insurance Corporation NDIC is shifting the centre of its mandate from simply paying depositors after bank failures to using technology, risk surveillance and stronger financial-sector safeguards to prevent institutional distress from threatening confidence in the banking system.
The Corporation’s Managing Director/Chief Executive, Mr Thompson Oludare Sunday, disclosed this at the NDIC Special Day at the 21st Abuja International Trade Fair organised by the Abuja Chamber of Commerce, Industry, Mines and Agriculture.
Speaking on the theme, “Resilience: Trade, Taxation and the Economy,” Sunday said a resilient banking system was indispensable to the Federal Government’s ambition of building a $1 trillion economy by 2030.
He explained that businesses required a stable financial system to protect working capital, process payments and provide access to credit needed for investment and expansion.
A major plank of the Corporation’s strategy, according to him, is the expansion of deposit insurance coverage and deployment of digital infrastructure to shorten the time required to reimburse depositors when a bank fails.
The NDIC raised the maximum insured deposit limit in 2024 to ₦5 million per depositor per Deposit Money Bank (DMB) and Mobile Money Operator (MMO), while depositors in Microfinance Banks, Primary Mortgage Banks and Payment Service Banks are covered up to ₦2 million.
Sunday said the revised limits provide full protection for more than 98 per cent of depositors across insured institutions.
He noted that depositors whose balances exceed the insured limits remain entitled to liquidation dividends from recoveries of debts owed to failed institutions and proceeds from the disposal of their physical assets.
“Our objective is straightforward: no depositor should lose confidence in the banking system merely because an insured institution has failed,” he said.
From liquidation to prevention
The NDIC boss said the Corporation was increasingly operating as a “Risk Minimizer”, rather than waiting for financial institutions to fail before intervening.
He said the approach was designed to identify vulnerabilities early and prevent problems in individual institutions from escalating into wider financial instability.
Measures being deployed include Risk-Based Supervision, an enhanced Differential Premium Assessment System, the Single Customer View Framework, a distress resolution suite and the Bank Liquidation Management System.
He added that closer cooperation with the Central Bank of Nigeria and other members of the financial safety-net architecture was also strengthening the sector’s capacity to respond to emerging risks.
The shift is significant for businesses and households because, beyond determining how much depositors recover after a bank failure, the effectiveness of early-warning and resolution mechanisms can influence confidence in the wider financial system.
Digital claims reshape bank-failure response
Sunday said technology was also changing the experience of depositors affected by bank closures.
According to him, the NDIC is leveraging Bank Verification Numbers (BVN), Single Customer View (SCV), NIBSS infrastructure and other digital solutions to identify and verify depositors and process insured claims.
He said verified depositors of failed banks could now receive their insured deposits within days of a bank’s closure, compared with the more cumbersome manual procedures previously associated with claims processing.
The Corporation has also launched an upgraded website as part of the digital transformation of its depositor-protection services.
The platform, launched on September 19, provides information on deposit insurance limits and automated claims-processing features, while an upgraded directory allows members of the public to verify institutions insured by the NDIC.
A Quick Action Bar gives users direct access to File Claim, Check Banks, Report Failed Bank and FAQs, while an AI-powered virtual assistant provides additional support to depositors.
“This is more than a website upgrade. It is another step in our journey towards a more accessible, responsive and technology-driven NDIC,” Sunday said.
He urged depositors, creditors and shareholders of closed banks to use the Corporation’s digital platforms when processing claims, stressing that accurate account information linked to BVNs could speed up reimbursement.
He added that digital processes had reduced the need for depositors to visit failed-bank premises or NDIC offices for physical verification and to move large volumes of documents physically.
NDIC warns against Ponzi schemes
The Corporation also renewed its warning against unlicensed investment schemes and Ponzi operations, particularly those offering unusually high returns.
Sunday advised Nigerians and businesses against keeping substantial funds outside the formal financial system or committing savings to fund managers that are not properly licensed.
He said the repeated collapse of Ponzi schemes had demonstrated the financial and emotional costs of placing hard-earned money in unregulated schemes.
“If an investment promise sounds too good to be true, Nigerians should pause, ask questions and verify before committing their money,” he cautioned.
He, however, stressed that regulation and technology alone could not provide complete protection, identifying financial literacy as the first line of defence for depositors and business owners.
He urged Nigerians to improve their financial knowledge, use digital financial services responsibly, maintain sound financial practices and seek guidance from relevant regulatory institutions where necessary.
“The more informed the public becomes, the stronger our collective capacity to build a resilient financial system,” he said.