Nigeria Deposit Insurance Corporation (NDIC) yesterday reassured on the multiple layers of protection for the Nigerian banking industry with more than 98 per cent of depositors and 281 million accounts insured by the corporation.
The Managing Director, Nigeria Deposit Insurance Corporation (NDIC), Thompson Sunday, who spoke yesterday in Lagos at the retreat for members of the House Of Representatives Committee on Insurance and Actuarial Matters, said striking the right balance between innovation, consumer protection, and financial stability remains a key policy imperative.
The theme of the retreat was “Strengthening the Financial Safety Net in an Era of Banking Sector Recapitalisation and Fintech Innovation”. He said the increasing digitisation of financial services has heightened exposure to cyber threats, fraud, data breaches, and operational risks. He said that with banks’ adoption of emerging technologies, regulators and safety-net participants must remain proactive in identifying and mitigating these risks while encouraging innovation.
The NDIC boss also highlighted the rapid growth of financial technology (fintech) which has revolutionised the way financial services are delivered. He said: “Digital banking platforms, mobile money services, payment solution providers, and other fintech innovations have expanded access to financial services and accelerated progress toward financial inclusion. Millions of previously unbanked and underserved Nigerians now have access to formal financial services through digital channels”.
He said that as the banking industry adjusts to higher capital requirements and technological innovations reshape financial service delivery, adding that its imperative for banks to reinforce rules that safeguard financial stability and protect depositors’ funds. According to him, a strong and well-coordinated financial safety net system is necessary for maintaining stability and resilience in any modern financial system. “It promotes public confidence, protects depositors, supports orderly resolution of distressed financial institutions, and helps prevent systemic crises. At a time when Nigeria is pursuing ambitious economic growth objectives, including the goal of attaining a one trillion-dollar economy in 2030, a robust and credible financial safety net is essential to maintaining depositors’ and investors’ confidence and enhancing financial system resilience,” Sunday said.
He said the recently concluded banking sector recapitalisation programme represents a significant milestone in strengthening the capacity of Nigerian banks to support economic development. “Well-capitalised banks are better positioned to absorb shocks, finance large-scale investments, support enterprise growth, and withstand periods of economic uncertainty. However, while recapitalisation enhances the resilience of financial institutions, it must be complemented by effective regulation, sound governance practices, strong risk management frameworks and good compliance culture, all attribute of a reliable financial safety net,” Sunday said.
He said the stability of the financial system depends largely on the trust that depositors and investors place in financial institutions.