The Nigeria Deposit Insurance Corporation (NDIC) recently distinguished itself as one of the few government agencies and parastatals that manages finance in line with the Fiscal Responsibility Act (FRA).
The Fiscal Responsibility Commission (FRC) singled out the corporation for commendation for remitting a total sum of N15.4 billion to the Consolidated Revenue Fund. “It is quite commendable that the NDIC is one of the few corporations that have fully complied with the International Financial Reporting Standard (IFRS),” says the FRC.
Remarkably, the Financial Reporting Council of Nigeria (FRCN) after examining the NDIC’s 2014 annual submission of Audited Financial Statements, noted that the corporation is being managed in line with sound corporate governance with its complete and well above average compliance in line with the sections of the Fiscal Responsibility Act (FRA) 2007.
A letter dated December 14, 2015 and signed by the FRC Acting Chairman, Victor Muruako, described NDIC as a worthy Federal Government agency, stressing that the commendation was given for NDIC’s compliance in submitting its audited financial statements of 2007-2014 as well as its prompt payment of operating surplus.
The FRC report stated that the corporation was well above average in compliance with Sections 21- 23 of the FRA Act 2007 and had fully complied with the provisions of the General Reserve Fund in which 20 per cent of its operating surplus was retained in accordance with Section 22 (2) of the FRA 2007.
The report also commended the corporation’s compliance with the payment of 25 per cent of its gross revenue to the Consolidated Revenue Account of the federation in accordance with ministerial circular on Internally-Generated Revenue (IGR).
Meanwhile, the NDIC also released the deposit insurance guidelines for mobile payments systems. Mobile payment refers to the use of mobile telephone technology for payments and financial transactions. The NDIC’s deposit insurance guideline for mobile payment system is known as “Pass-Through Deposit Insurance scheme.”
The NDIC Pass-Through Insurance consists of the provision for maximum coverage level of N500,000 per subscriber in line with the NDIC Act. The relationship between the Mobile Money Operators (MMOs) and their subscribers shall be based on Bare Trust Arrangement, an account where each beneficiary holds a separate share and is entitled to protection within the parameters of the scheme. Moreover, the records of the Trust (Pool) account holders at the insured institutions shall clearly indicate that the account holder is an Agent or Custodian acting in a fiduciary capacity, and not the actual owner of the funds.
“The Pass-Through Deposit Insurance Scheme is the protection provided by the NDIC to mobile money subscribers, whereby the corporation insures funds that are deposited by a mobile money operator in the deposit money banks (DMBs). The MMO acts as a custodian on behalf of one or more subscribers who are actual owners of the funds as if those actual owners have deposits in the DMBs,” NDIC said.
It described the Mobile Payments System (MPS) as payment services operated under financial regulations and performed through the use of mobile devices such as smart phones, cell phones, tablets, personal digital devices and other electronic devices. It is also a convenient, safe and affordable way by which subscribers make instant transfer of funds and execute payments for goods and services from anywhere at any time without having a bank account.
The participants in the Pass-Through Deposit Insurance Scheme are made up of MMO, who is an entrepreneur licensed by the Central Bank of Nigeria (CBN) to carry out the business of mobile payment within the country. Others are payment agent, bank, customers, the Mobile Network Operators (MNOs), and pool account. The Agent is appointed by the MPOs to receive or pay monies at various locations on its behalf. The bank maintains the pool account wherein all subscribers’ balances are domiciled by the MPO, while customers are the subscribers to MPOs for mobile payments services. The MNO provides telecommunication network/infrastructure which enables switching, processing and settlement for mobile payments services while the Pool Account is account opened and operated by an MMO in a deposit money bank on behalf of its subscribers.