NDIC insures 98% customers’ deposit in banks

The Nigeria Deposit Insurance Corporation NDIC has said that  its insurance  covered all the 98 per cent of customers  deposits in the nation’s banks.   Deputy Director Banking Examination, of the NDIC, Mohammed Y. Umar, who disclosed this at the NDIC sensitization programme  for Corp members at the  NYSC Orientation Camp Sagamu Ogun State said that 98 per cent of deposits in banks are less than N500,000, adding that  it was only two percent of deposits in banks that are not insured by the Corporation.
He said that the NDIC has had no course to rescue any bank from going under after the bridge banks saga.
Explaining to the corps members on the major  factors that could lead to the liquidation of banks, he said “there are numerous reasons why a bank could be liquidated, but the most dominant ones according to him include; operational risks which has to do with systems, people, processes and external events.  Speaking further he said “internally, it could be a bank’ s lack of adequate capital, stressing that  Inadequate capital will make a bank not to  be able to operate thus not make profit.  And the banks need to plough back earnings to grow and if it  can not grow, it  will have illiquidity and once there is illiquidity, there will be  a run and no bank can survive a run and once there is a run in the  bank, it  has  to close shop as no one will deposit money in such bank again.”. He said that the senitization was very important because Corp members are critical because most of them would be posted to the communities to serve and they will be interacting with the villagers. He said that  if corpers were properly educated, they can easily tell the people in the village how safe their deposits are in the banks.  This he said would encourage more people to open bank accounts and access financial services, adding that the Corporation is using the senitization programme to drive financial inclusion.
“We also want the Corp members to know how the financial services sector work so they can educate others. A lot of people are ignorant about banking and they are scared if they deposit their monies, the bank will collapse and they will lose money. It also useful to the corps members because they are also staring their loves ones thus they should also take banking serious,” he added.
Speaking further he said “there is no body that has a claim in NDIC that we have not paid. The issue of deposit insurer is accepted worldwide but low awareness about the value of deposit insurer is still key because we are only relevant when a bank collapse.” He said that when people get to bank and withdraw money they do not really care if NDIC exists or not, noting that people starts looking for NDIC when they have problem with their banks.
The Managing Director/Chief Executive of the NDIC), Alhaji Umaru Ibrahim recently at a seminar  said  that there is need to always strike a balance between financial performance indices and non-finance value creating measurements in determining banks’ board performances.
He said that instead of board of directors of financial institutions concentrating on financial measurements such as capital adequacy, asset quality, liquidity, profitability and efficiency, it had become imperative for them to equally focus attention to indices such as effective risk management, gender equality and family friendliness as well as staff compensation, development and sustainability.