The Nigeria Deposit Insurance Corporation (NDIC) has raised alarm over the Federal Government’s mandatory fiscal deductions, warning that they are hindering the buildup of a strong Deposit Insurance Fund essential for protecting bank depositors.
Okay News reports that NDIC Managing Director Thompson Oludare Sunday highlighted the issue during a courtesy visit to Dr. Armstrong Takang, Chief Executive of the Ministry of Finance Incorporated (MOFI) in Abuja.
He specifically pointed to the 50 per cent cost-to-income policy as a key constraint on the Corporation’s financial capacity.
Sunday emphasised NDIC’s full compliance with laws such as the Fiscal Responsibility Act 2007, including remittances of 20 per cent of gross earnings or 80 per cent of net surplus.
However, he argued that international standards set by the International Association of Deposit Insurers (IADI) require independent funding to reimburse depositors without government reliance during bank failures.
The deductions, he said, limit operational flexibility and weaken readiness for potential banking distress.
NDIC is therefore seeking an exemption to prioritise strengthening the Deposit Insurance Fund and enhance resilience.
In response, Dr. Takang commended NDIC’s transparency and fiscal discipline, pledging MOFI’s support in engaging the Ministry of Finance on the concerns.
He noted that a robust NDIC is crucial for depositor confidence and overall financial system stability.
Both institutions reaffirmed commitment to ongoing collaboration to balance compliance with the core mandate of safeguarding Nigeria’s banking sector.
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