Shun wonder banks, NDIC warns unwary customers

The Nigeria Deposit Insurance Corporation (NDIC) has urged Nigerians to be wary in patronising “wonder banks’’ that give extra-ordinary interest rates and profits in return for investments.
The Managing Director of NDIC, Alhaji Umaru Ibrahim, gave this warning in an address he delivered at the NDIC special day at the ongoing 29Thenugu international trade fair in Enugu yesterday.
Umaru, who was represented by NDIC’s Director of Strategy Development, Mr Festus Ekechi, said many Nigerians continued to lose fortunes and their life savings to Ponzi schemes and other illegal fund managers with disastrous consequences.
“The Corporation’s activities, through the supervision of banks’ continuous monitoring and oversight, serve as consumer protection for depositors [in legal banks] which enhances confidence in the financial system.
“This acts as an incentive for the unbanked to access financial services of licensed banks.
“This is vital to financial inclusion because poor and uninformed depositors need assurance that the services of the licensed deposit taking institutions are safe and that they have access to their money whenever they need it,’’ he said.
The managing director said the NDIC was determined to continuously contribute to the safety and soundness of the nation’s financial system.
According to him, the key mandate of the Corporation is to provide deposit guarantee to depositors of insured financial institutions, banks supervision, distress resolution, and bank liquidation.
He noted that since inception of NDIC, it had grown fromstrength-to-strength not only in the implementation of its mandate, but also in ensuring that the over-riding public policy objectives forestablishing an explicit Deposit Insurance system in the country were realised.
“With the protection of depositors in mind, coupled with the realities of the nation’s economy over time, the Maximum Deposit Insurance Coverage (MDIC) per depositor per bank progressively increased from N50, 000 in 1989 to its current N500,000 per depositor per Deposit Money Banks (DMBs).