By Oluwakemi Kindness
The Nigeria Deposit Insurance Corporation (NDIC) says it is seeking an exemption from the Federal Government’s 50 per cent cost-to-income ratio policy.
The NDIC cited its impact on the Corporation’s ability to build a strong Deposit Insurance Fund and respond effectively to bank failures.
The Managing Director and Chief Executive of NDIC, Thompson Sunday, made this known during a courtesy visit to the Managing Director and Chief Executive of the Ministry of Finance Incorporated (MOFI), Dr. Armstrong Takang, as part of NDIC’s post-assumption engagement with key stakeholders.
A statement on Tuesday by the Heaf.of communication, NDIC, Hawwau Gambo, says Sunday said that although NDIC complies fully with the cost-to-income ratio policy, the deductions arising from it constrain the Corporation’s capacity to accumulate sufficient funds required for its core mandate of depositor protection.
He explained that international best practices under the Core Principles for Effective Deposit Insurance issued by the International Association of Deposit Insurers (IADI) require deposit insurers to maintain adequate funds to reimburse depositors when banks fail without recourse to government support.
According to him, the exemption being sought is aimed at strengthening NDIC’s financial capacity and aligning its operations with global standards.
Beyond the policy concern, Sunday reaffirmed NDIC’s strict compliance with fiscal and financial regulations, including the Fiscal Responsibility Act (FRA) 2007.
He noted that the Corporation consistently remits 20 per cent of gross earnings or 80 per cent of net surplus, as applicable, to the Federal Government and submits its financial statements ahead of statutory deadlines.
He described fiscal discipline, transparency and accountability as central to NDIC’s credibility as a key institution within Nigeria’s financial safety-net, responsible for protecting depositors and promoting confidence in the banking system.
Sunday also highlighted the importance of sustained collaboration with MOFI, noting that the Federal Government, through the agency, holds a 40 per cent equity stake in NDIC.
In his response, Dr. Takang commended NDIC’s commitment to regulatory compliance and assured that MOFI would continue to engage the Federal Ministry of Finance on the Corporation’s concerns, stressing that a strong NDIC is vital to the stability of Nigeria’s financial system.
