NDIC Announces New Minimum Account Balance for Customers To Get Refund if a Bank Fails

NDIC Announces New Minimum Account Balance for Customers To Get Refund if a Bank Fails

  • The Nigeria Deposit Insurance Corporation has introduced a new minimum bank account balance requirement for customers to qualify for insurance
  • The insurance gives a customer the right to receive back a percentage of their sum in case of a bank failure
  • Customers whose bank accounts do not meet the specified minimum balance will not receive a refund

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Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The Nigeria Deposit Insurance Corporation (NDIC) has announced an increase in the deposit insurance coverage for all licensed deposit-taking financial institutions.

Deposit insurance coverage guarantees that an account holder's money at a financial institution is safe up to a certain amount.

NDIC addresses deposit insurance for bank customers in Nigeria
NDIC increases deposit insurance coverage for banks Photo credit: Benson Ibeabuchi
Source: Getty Images

If a financial institution fails or goes bankrupt, this coverage ensures that depositors will be reimbursed.

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New bank deposit minimum requirement

Announcing the changes, Bello Hassan, the NDIC Managing Director/Chief Executive, informed journalists in Abuja on Thursday, April 5, 2024, that the changes apply to Deposit Money Banks (DMBs), Microfinance Banks (MFBs), Primary Mortgage Banks (PMBs), Payment Service Banks (PSBs), and Mobile Money Operators (MMOs).

He explained that the increase ensured that depositors are better protected in the unlikely event of a bank failure.

Hassan also stressed that the increased deposit insurance coverage levels will take effect immediately, offering Nigerians greater peace of mind when saving their money with licensed financial institutions, Punch reports.

He added:

"The move is expected to strengthen the banking system and encourage further financial inclusion within the country."

Here is a breakdown of the changes

Type of financial institutionPrevious deposit minimumNew deposit minimum%amount for customers in case of failure
Deposit Money Banks (DMBs)N500,000N5,000,00098.98%
Microfinance Banks (MFBs)N200,000N2,000,00099.27%
Primary Mortgage Banks (PMBs)N500,000 N2,000,00099.34%
Payment Service Banks (PSBs)N500,000N2,000,00099.99%
Mobile Money Operators (MMOs)N5,000,00098.98%

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Full list of failed microfinance banks

Earlier, Legit.ng revealed that the directors of 183 failed microfinance banks and Primary Mortgage Banks would soon face investigation over their roles in the failed institutions.

The managing director/chief executive officer of NDIC, Bello Hassan, disclosed this during a workshop organised by the corporation for security and law enforcement agencies in Lagos.

Vanguard reports that Hassan said the corporation would soon approach security agencies to investigate some of the failed banks' directors and bosses, bringing them to justice and holding them accountable for their collapse.

Source: Legit.ng

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