The Nigeria Deposit Insurance Corporation (NDIC) has reaffirmed its full compliance with fiscal and financial regulations, while calling for regulatory flexibility to strengthen its capacity to protect depositors and safeguard the banking system.
The Managing Director (MD)/ Chief Executive of NDIC, Mr. Thompson Oludare Sunday, made this known during a courtesy visit to the MD of the Ministry of Finance Incorporated, Dr. Armstrong Takang. The visit formed part of NDIC’s post assumption engagement with key stakeholders following Mr. Sunday’s appointment in July 2025.
Mr. Sunday said the corporation has consistently met its obligations under the Fiscal Responsibility Act (FRA) of 2007, including remitting the required portion of its earnings to the federal government. He explained that NDIC pays either 20 percent of gross earnings or 80 percent of net surplus, depending on what applies, and submits its financial statements ahead of statutory deadlines.
According to him, this track record reflects NDIC’s commitment to accountability and transparency, which he described as essential to its role within Nigeria’s financial safety net. As the institution responsible for protecting depositors, NDIC relies on public trust to remain effective, and fiscal discipline is a key part of maintaining that trust.
Why NDIC is asking for an exemption
While reaffirming compliance, Mr. Sunday raised concerns about the Federal Government’s 50 percent cost to income ratio policy. He noted that the policy limits NDIC’s ability to build a sufficiently strong Deposit Insurance Fund.
He explained that global best practices, as outlined by the International Association of Deposit Insurers, require deposit insurance agencies to maintain enough reserves to reimburse depositors promptly in the event of bank failures without relying on government support. In NDIC’s view, the current cost constraint makes this goal harder to achieve.
For this reason, the corporation is seeking an exemption that would allow it to retain more earnings and strengthen its financial buffers.
What this means for the financial sector
For the banking sector, a stronger NDIC balance sheet is critical. Deposit insurance plays a central role in maintaining confidence, especially during periods of stress. If depositors trust that their funds are protected, the risk of panic withdrawals is reduced, helping to preserve system stability.
An exemption that allows NDIC to build larger reserves could also reduce potential pressure on public finances in the event of bank failures, as the corporation would be better positioned to meet its obligations independently.
Implications for households and businesses
For households, the issue may seem distant, but it is directly linked to savings security. Stronger deposit insurance means greater assurance that deposits are protected if a bank runs into trouble. This confidence supports savings behaviour and trust in the formal banking system.
For businesses, especially small and medium enterprises that rely heavily on bank deposits for working capital, a resilient deposit insurance framework provides reassurance and supports smoother financial planning.
Government position and outlook
Mr. Sunday described MOFI as a key stakeholder, noting that the federal government holds a 40 percent equity stake in NDIC. He stressed that continued collaboration is necessary to balance government fiscal objectives with the need to protect depositors.
In response, Dr. Takang commended NDIC’s record of compliance and assured the corporation of MOFI’s continued engagement with the Ministry of Finance to support a strong and resilient deposit insurance system.
The discussion highlights a broader policy question. How to maintain fiscal discipline while ensuring that institutions responsible for financial stability are adequately resourced. As Nigeria continues reforms in its financial sector, how this balance is struck will matter for banks, depositors and the wider economy.
Discover more from StakeBridge Media
Subscribe to get the latest posts sent to your email.