NDIC And NIBSS Set to Improve Depositor Compensation from Failed Banks

The Nigeria Deposit Insurance Corporation (NDIC) and the Nigeria Inter-Bank Settlement System Plc (NIBSS) are set to sign a Memorandum of Understanding (MoU) aimed at improving the efficiency of reimbursements for depositors in cases of bank failure. The NDIC disclosed this on Wednesday, with its Managing Director/Chief Executive, Mr Thompson Sunday, announcing the plan during a courtesy visit by the NIBSS Executive Management team, led by Managing Director/Chief Executive, Mr Premier Oiwoh, to the Corporation’s Abuja Head Office.

The MoU comes a day after the NDIC began the liquidation of two mortgage banks, Aso Savings and Loans and Union Homes Savings and Loans, whose licences were revoked by the Central Bank of Nigeria. Deposit holders of the defunct banks will receive insured deposits of up to N2 million per individual, while claims above this threshold will be settled after the banks’ assets are liquidated.

Mr Sunday praised NIBSS for its long-standing support in strengthening NDIC’s mandate of protecting depositors and promoting confidence in the banking system. He highlighted NIBSS’s role in digital verification processes, particularly through the Bank Verification Number platform, which facilitated smooth payments to depositors of the failed Heritage Bank Limited.

“You have been a reliable partner, and NDIC remains committed to that collaboration. Without NIBSS’s support, achieving the milestone with Heritage Bank would have been difficult, even under the impromptu circumstances. This MoU will formalise and strengthen our partnership,” Sunday said.

The MoU is expected to cover areas including real-time synchronisation of NDIC deposit records for swift account verification, expansion of payout channels to include Mobile Money Operators and a potential NDIC-branded mobile platform, and investment in Single Customer View and interoperability infrastructure to enable instant validation during bank resolutions. Sunday also commended NIBSS for advancing Nigeria’s payments system and strengthening fraud prevention.

In response, NIBSS MD/CE Oiwoh expressed gratitude for the partnership and reaffirmed the organisation’s commitment to supporting NDIC in depositor protection. He stressed the importance of prompt reimbursements in maintaining public trust and financial inclusion and assured that NIBSS is collaborating with law enforcement to reinforce the safety and efficiency of Nigeria’s payment system.

The MoU is expected to usher in a technology-driven, digitised, and responsive system for depositor payouts, bolstering confidence in the nation’s financial safety-net framework.