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LequteMan
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The Nigeria Deposit Insurance Corporation (NDIC) says it has reduced the deposit insurance premium rate from 40 to 35 basis points to all Deposit Money Banks (DMBs).
This is contained in a statement issued by Mr Hakeem Bakare, Head, Communication and Public Affairs of the Corporation, on Sunday in Abuja.
It said the reduction in the premium was to further contribute to the financial system stability and promote public confidence in the banking sector.
According to the statement, the reduction is initiated to consolidate on the gains achieved by the corporation's migration from Flat Rate Premium System (FRPS) to Differential Premium Assessment System (DPAS).
It said the premium rate took effect from January.
It noted that the DPAS’s approach considered the risk each bank posed to the system and urged banks to adopt sound risk management practices.
It said that the Managing Director of NDIC, Umaru Ibrahim, had earlier hinted of the reduction at the last Financial Correspondents Association of Nigeria (FICAN) Workshop in December 2014 in Katsina State.
It added that Umaru had also emphasised the importance of Principle 11 of the Core Principles for Effective Deposit Insurance System in the country.
It explained that the principle required Deposit Insurance Agencies (DIAs) to set aside adequate funds to ensure depositors’ prompt reimbursement in the event of any bank failure.
He said that the corporation would from 2015 set new coverage levels for the DMBs in view of their relatively large volumes of deposits.
It said that premium collection from the insured banks contributed substantially to the funds available to the NDIC to discharge its mandate.
According to the statement, at present, the corporation has covered 97 per cent of bank depositors, which is an indication of adequate coverage and appropriate pricing in the sector.
The News Agency of Nigeria (NAN) reports that the corporation began the insurance premium rebate since the commencement of DPAS in 2008 but the import began in 2010.
The aim is to contribute to the Financial Stability Fund that is spearheaded by the Central Bank of Nigeria (CBN).
The corporation supported the fund by reducing the premium base rate from 50 to 40 basis points to ease the premium burden on the DMBs.
In 2012, 2013 and 2014, the corporation granted N53 billion, N63.6 billion and N75.98 billion rebates respectively to the DMBs.
The corporation administers three types of funds - Deposit Insurance Fund (DIF) for DMBs, Special Insured Institutions Fund (SIIF) for MFBs and PMBs and Non-Interest Deposit Insurance Fund (NIDIF) for Non-Interest Banks.
#Nigeria #NDIC #SIIF
This is contained in a statement issued by Mr Hakeem Bakare, Head, Communication and Public Affairs of the Corporation, on Sunday in Abuja.
It said the reduction in the premium was to further contribute to the financial system stability and promote public confidence in the banking sector.
According to the statement, the reduction is initiated to consolidate on the gains achieved by the corporation's migration from Flat Rate Premium System (FRPS) to Differential Premium Assessment System (DPAS).
It said the premium rate took effect from January.
It noted that the DPAS’s approach considered the risk each bank posed to the system and urged banks to adopt sound risk management practices.
It said that the Managing Director of NDIC, Umaru Ibrahim, had earlier hinted of the reduction at the last Financial Correspondents Association of Nigeria (FICAN) Workshop in December 2014 in Katsina State.
It added that Umaru had also emphasised the importance of Principle 11 of the Core Principles for Effective Deposit Insurance System in the country.
It explained that the principle required Deposit Insurance Agencies (DIAs) to set aside adequate funds to ensure depositors’ prompt reimbursement in the event of any bank failure.
He said that the corporation would from 2015 set new coverage levels for the DMBs in view of their relatively large volumes of deposits.
It said that premium collection from the insured banks contributed substantially to the funds available to the NDIC to discharge its mandate.
According to the statement, at present, the corporation has covered 97 per cent of bank depositors, which is an indication of adequate coverage and appropriate pricing in the sector.
The News Agency of Nigeria (NAN) reports that the corporation began the insurance premium rebate since the commencement of DPAS in 2008 but the import began in 2010.
The aim is to contribute to the Financial Stability Fund that is spearheaded by the Central Bank of Nigeria (CBN).
The corporation supported the fund by reducing the premium base rate from 50 to 40 basis points to ease the premium burden on the DMBs.
In 2012, 2013 and 2014, the corporation granted N53 billion, N63.6 billion and N75.98 billion rebates respectively to the DMBs.
The corporation administers three types of funds - Deposit Insurance Fund (DIF) for DMBs, Special Insured Institutions Fund (SIIF) for MFBs and PMBs and Non-Interest Deposit Insurance Fund (NIDIF) for Non-Interest Banks.
#Nigeria #NDIC #SIIF
