As the CBN’s Open Banking framework takes shape, the NDIC must adapt its deposit insurance mandate to cover new account structures, aggregators, and embedded finance products.
The Central Bank of Nigeria’s Open Banking Regulatory Framework, issued in 2023, is reshaping the architecture of Nigeria’s financial services industry. APIs now allow third-party providers to access customer account data and initiate payments on behalf of customers, creating a layer of financial intermediation between depositors and their banks that deposit insurance frameworks were not originally designed to address.
The core question for deposit insurers is straightforward but technically complex: when a depositor’s funds pass through a payment initiation service provider before reaching an insured bank, does the deposit insurance protection follow the funds?
The Omnibus Account Problem
Several digital wallet providers and savings aggregators currently pool customer funds into single omnibus accounts at licensed banks. Under current NDIC rules, the insurance applies at the level of the account holder — meaning the aggregator, not the individual end customers — creating a significant protection gap for potentially millions of digital-native depositors.
The NDIC is currently in consultation with the CBN and major aggregators to develop a pass-through coverage model. Implementation is expected to require amendments to the NDIC Act and a new prudential notice from the CBN.
Timeline and Consultation Process
A public consultation paper is expected to be released in Q1 2025, with proposed legislative amendments submitted to the National Assembly in the second half of the year.