. . . Corporation Established To Protect Depositors Against Losses
Nigeria Deposit Insurance Corporation ( NDIC ) says Government is keen to providing confidence in the financial system by putting in place finacial safety net to promote financial system stability and support economic growth and development.
The Corporation disclosed this during the 2021 retreat of the committee with NDIC in Kaduna at the weekend with the theme: ” Financial System Stability; A Panacea for Sustainable Economic Growth And Development – The Role of NDIC.
Speaking at the retreat, the Managing Director (MD), NDIC, Bello Hassan explained that deposit insurance system is an important component of the financial safety net, adding that the mechanism is an important means to gain public confidence in the banking system and achieve financial and banking system stability.
According to him, deposit insurance system is one of the most important elements of economic growth and development, especially in a developing economy like Nigeria.
The MD, while speaking further disclosed that the aim of the deposit insurance is to ensuring that depositors do not lose their deposits held with the bank if the bank becomes insolvent and subsequently fail.
” Another goal of deposit insurance is to contribute to the stability of the financial system by engendering public confidence in the banking system,” Hassan said.
In his opening remarks, the MD further explained that “the use of technology is inevitable. Financial institutions have had to harness technological advancements such as fintech, to be efficient and remain competitive. The increased reliance on such digital infrastructure has led to exposure to risks, such as cyber – attacks. Given the financial and technological interconnectedness among the financial institutions, losses due to cyber – attacks not only affect individual banks but also pose damaging risk to the entire finacial system with serious implication for economic growth and development.”
The Chairman NDIC Board of Directors, Ronke Sokefun, in her good will message stressed that the stability of the financial system in a developing nation like Nigeria, is inextricably linked with economic growth and societal welfare.
According to the Board of Directors’ Chairma, NDIC was established by government to protect depositors against the loss of thier insured deposits in the unlikely event that a bank is unable to meet its obligations to the depositors.