THE Nigeria Deposit Insurance Corporation (NDIC) has increased bank customers’ maximum deposit insurance coverage to N5 million.

The NDIC’s managing director/chief executive officer, Bello Hassan, disclosed this at a press conference in Abuja on Thursday, May 2.

He said deposit insurance coverage for bank customers was raised from N500,000 to N5 million, representing a 900 per cent increase.

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The “NDIC’s Interim Management Committee (IMC), during its 18th meeting held on April 24th and 25th, approved an increase in the maximum deposit insurance coverage levels for all licensed deposit-taking financial institutions with immediate effect.

“The maximum deposit insurance coverage has been elevated from N500,000 to N5,000,000. This change will now fully cover 98.98 per cent of depositors, significantly up from the current 89.20 per cent,” Hassan said.

The NDIC also increased the deposit insurance coverage for other financial institutions.

It raised the coverage for microfinance banks (MfBs) to N2 million from N200,000 to protect 99.27 per cent of depositors, compared to 98.76 per cent under the previous limits.

Primary mortgage banks’ (PMBs) coverage was increased from N500,000 to N2 million to ensure 99.34 per cent of depositors are covered, up from 97.98 per cent.

The corporation also adjusted the payment service banks (PSBs) coverage from N500,000 to N2 million, covering nearly all depositors at 99.99 per cent of the coverage. It increased mobile money operators (MMOs) to N5 million per subscriber.

The NDIC boss said, “In terms of the value of deposit covered, the revised coverage would increase the value of deposits covered by deposit insurance to 25.37 per cent compared with the current cover of 6.31 per cent of total value of deposits.”

Hassan said the revised coverage struck a strategic balance between protecting depositors and ensuring the financial system’s stability. The changes aim to extend protection to a larger percentage of the population, enhance financial inclusion, and mitigate the potentially destabilising effects of bank operations.

The ICIR reports that deposit insurance coverage is a system established by the government to protect depositors against the loss of their insured deposits, as the banking sector and other financial institutions that accept deposits from the public are vulnerable to liquidity and solvency problems, among other things, hence the need to protect customers’ deposits.