NDIC warns Nigerians against wonder banks

The Managing Director, MD, of the corporation, Alh. Umaru Ibrahim, gave the warning at a press briefing in Abuja, yesterday, to mark its 25th anniversary.

In his words…

“The problem of wonder banks are emerging again and the public must be careful about anyone coming to them and promising very high deposit interests which could be at the detriment of the deposit itself

“If someone comes and promises a very high interest in order to take your money.  You should be careful because his real intention might be to run away with your deposit”

      “a cumulative amount of ¦ 6.825 billion was paid         to 528,277 insured depositors of the 48 DMBs             in-liquidation as at August 31, 2014.  While for             the 186 closed MFBs, the cumulative amount of         N2.756 billion had been paid to 80,059 verified            depositors as at 31st August, 2014”

      “In order to engender confidence of the public in         subscribing the products of the MMOs, the NDIC       has considered as imperative the extension of          deposit insurance to the individual subscribers of      the MMOs in the form of pass-through deposit            insurance.  The framework for making the pass-          through insurance scheme operational is                      currently being finalised by the Corporation”

      “the maximum deposit insurance coverage was        increased from its set level of N50,000 at                      inception to N200,000 in 2006 and subsequently        to N200,000 in 2010  and later to its present level       of N500,000 for DMBs. Deposit insurance was             extended to Microfinance Banks/Primary                     Mortgage Banks in 2006 with a coverage level of         N100,000, which was increased to N200,000 in        2010”

The NDIC boss revealed that banks’  contributions to the Financial Stability Fund  which has been reduced from 0.5 to 0.4 per cent premium base rate would be further reduced to 0.3 to encourage banks in their contribution to the Financial Stability Fund and reduce the cost of funds by deposit money banks.

The earlier cut in banks’ contribution saved them about N53 billion between 2011 and this year, he said, expressing optimism that a further downward review would save banks more funds.