About NDIC

The NDIC guarantees the payment of deposits up to a legally specified maximum limit in the event of failure of an insured financial institution. Participation is strictly mandatory for all deposit-taking financial institutions licensed by the Central Bank of Nigeria (CBN). This includes Deposit Money Banks (DMBs), Microfinance Banks (MFBs), Primary Mortgage Banks (PMBs), Non-Interest Banks (NIBs), and Payment Service Banks (PSBs). The Corporation recently revised its maximum coverage limits to ₦5,000,000 for DMBs and Mobile Money subscribers, and ₦2,000,000 for MFBs, PMBs, and PSBs. The Corporation provides pass-through deposit insurance coverage of up to 5 million per subscriber of a Mobile Money Operator (MMO) through the MMO's pooled account maintained with an insured financial institutions.

In concurrence with the CBN, the NDIC monitors and examines insured financial institutions to protect depositors, minimize the risk of bank failure, and prevent unsafe banking practices. Supervision helps foster monetary stability, ensure healthy competition, and promote an efficient payment system. The Corporation carries out its supervisory responsibilities through off-site surveillance and on-site examination of insured institutions' books and affairs from which exceptions are reported and recommendations made on how observed lapses should be corrected. Given that the Corporation and the CBN have supervisory powers, the two institutions collaborated in the discharge of their supervisory duties. Over the years, they have developed a comprehensive framework which has eliminated role conflict and duplication of efforts by the two institutions.

As a risk minimizer, one of the core mandates of the Corporation is to ensure that failing and failed financial insured institutions are resolved in a timely and efficient manner. The NDIC is mandated to step in and offer financial or technical assistance to distressed or failing financial institutions. The financial assistance can take the form of loans, guarantees for loans taken by the bank or acceptance of accommodation bills. The technical assistance may include takeover of management and control of the bank, changes in management of such failing institutions or assisted merger or acquisition by another institution. It structures and executes resolution options swiftly to maintain public confidence and prevent bank runs.

When the CBN revokes an insured financial institution's license, the NDIC acts as the official liquidator to wind up its affairs, sell off its physical assets, realize investments and recover outstanding debts. The liquidation process is preceded by revocation of license of a failed institution. It involves orderly and efficient closure of the failed institution with minimum disruption to the banking system, cost-effective realization of assets and settlement of claims of depositors, creditors and shareholders, where possible, though depositors are entitled to be paid in priority to all creditors as provided for by law (Section 54, Banks and Other Financial Institutions Act 2004). The corporation sells physical assets, realize investments and dispose of physical assets (Properties, Plants and Equipment) landed properties to pay "liquidation dividends" to uninsured depositors (those with balances exceeding the guaranteed limit) and creditors. The 2023 Act grants the NDIC significantly expanded legal powers to track assets, bypass long court delays, and prosecute parties or executives responsible for the bank's failure.