NDIC’s push for the return of Nigeria Savings Bank

Umaru Ibrahim, MD/CEO, NDIC

Umaru Ibrahim, MD/CEO, NDIC

The Nigeria Deposit Insurance Corporation (NDIC) is clamouring for the re-establishment of the Nigeria Savings Bank. Managing Director/Chief Executive of NDIC, Umaru Ibrahim said that the restoration of the bank has become imperative as it would help to expand the frontiers of Nigeria’s banking system and contribute to poverty eradication in the country.

Ibrahim spoke at a lecture entitled: “NDIC and Engendering Confidence in the Financial Services Sector for Poverty Reduction and Economic empowerment” held at National Institute for Policy and Strategic Studies Kuru, Jos. He said that the desire to effectively use post offices and leveraging information and communication technology (ICT) to facilitate financial intermediation would not only mobilise savings but also give access to credits.

He cited Britain which, in the last decade, transformed its post offices into elegant avenues of harnessing savings and credits creation. “Since we are talking of poverty alleviation, we can revisit the issue of National Savings Bank,” he said.

The Central Bank of Nigeria (CBN) and the Ministry of Communications, he said, have been discussing the modalities for effective transformation of post offices so as to serve as banks’ agents.

On how the NDIC engenders confidence in the financial system towards poverty reduction and economic empowerment, Ibrahim emphasized that being a part of the financial safety net, the Corporation contributes to poverty reduction as it focuses on deposit guarantee and protection of depositors’ interest. He explained that as at December, 2015, the NDIC’s insurance coverage was over 90 percent of the 67 million depositors in commercial banks whose deposit liabilities amounted to N17.5 trillion while the total sum of N165.5 billion belonging to 8.4 million depositors of microfinance banks (MFBs) and N73.71 billion belonging to 0.73 million depositors of primary mortgage banks (PMBs) were also covered by over 95 percent.

He added that the Corporation was contemplating the introduction of e-deposit payment system towards facilitating depositor payout within the shortest possible time. He said that Deposit Insurance Scheme (DIS) was one of the critical components of Financial System Safety-Net arrangement and financial guarantee to depositors, particularly the small depositors in the event of a bank failure, adding that any financial system that does not have a DIS could not be described as having a complete Financial Safety-Net arrangement.

By Dike Onwuamaeze

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