NDIC Confirms How Much Customers Will Get When Bank Collapses
- The NDIC has clarified the amount depositors are entitled to receive when banks fail
- The corporation also assured of the Nigerian banking system and protection of bank deposits
- In recent years several Nigerian banks have failed and the latest is Heritage Bank
The Nigeria Deposit Insurance Corporation (NDIC) has clarified how depositors are entitled to when banks fail, stressing that insured payments are capped under existing laws.
The payment amount varies depending on the financial institution that fails.
Source: Getty Images
Speaking during the 2026 budget defence before the House of Representatives Committee on Insurance and Actuarial Matters, NDIC Managing Director Thompson Oludare Sunday said depositors of failed deposit money banks are entitled to a maximum insured sum of N5 million, while customers of other institutions, including microfinance banks, can receive up to N2 million.
How NDIC pays customers of a failed bank
Sunday explained that when a bank’s licence is revoked by the Central Bank of Nigeria (CBN), the institution is handed over to NDIC as liquidator.
The corporation then pays the insured amount promptly, using depositors’ Bank Verification Numbers (BVN) to locate and credit their accounts in other banks without requiring physical visits.
He added that deposits exceeding the insured limit are not lost but are paid later through liquidation dividends, which depend on how much NDIC recovers from the sale of the failed bank’s assets, repayments from borrowers, and realisation of investments.
The clarification follows lingering public concerns after the collapse of Heritage Bank, whose licence was revoked in June 2024, sparking anxiety among customers and renewed debate about the safety of bank deposits in Nigeria.
The House of Representatives Committee said the explanation was necessary to dispel misconceptions that NDIC guarantees all deposits without limit and to reassure Nigerians that mechanisms are in place to protect depositors when banks fail, Guardian reports.
Source: Getty Images
The role of NDIC
NDIC was established to protect depositors and maintain confidence in the banking system by providing deposit insurance and supervising insured institutions. Under the framework, banks pay premiums to NDIC based on their risk profile, while depositors do not contribute directly, BusinessDay reports.
In recent years, the insured deposit limit was increased from N500,000 to N5 million per depositor to reflect inflation and rising deposit values. NDIC has said more than 90% of depositors in failed banks are usually fully reimbursed within days of licence revocation, as their balances fall within the insured threshold.
List of banks that have failed in Nigeria
Legit.ng earlier reported that Nigeria’s banking sector has witnessed dramatic rises and painful falls. From the distress era of the 1990s to the sweeping consolidation reforms of 2004–2005 and the post-global financial crisis clean-up of 2009–2011, several once-dominant financial institutions disappeared from the landscape.
According to a document by the NDIC, since 1994, over 53 deposit money banks have been closed, following the revocation of their licenses by the Central Bank of Nigeria.
The list of 10 notable Nigerian banks that failed, and why have ben provided.
Source: Legit.ng
