The Nigeria Deposit Insurance Corporation has said it is expanding grassroots stakeholder engagement as part of efforts to reinforce trust in the Nigerian banking system and strengthen depositor confidence.

This was disclosed at the NDIC Stakeholders’ Town Hall Meeting held in Lagos on Saturday, which brought together representatives of the Central Bank of Nigeria, financial institutions, trade associations, civil society organisations, academia, students, youth groups, women organisations and the media.

The PUNCH reports that the NDIC has been engaging with stakeholders across the country in recent days.

In his address, the Managing Director/Chief Executive of NDIC, Mr Sunday Thomson, represented by the Director, Bank Examination Department, Mrs Adeyinka Olukoya, emphasised the need to address misconceptions about the Deposit Insurance System.

He said, “We recognise that misconceptions exist regarding the scope, benefits, and limitations of the DIS. Some members of the public are unsure about what is covered and what is not, what steps to take when a bank is closed, or how depositors are reimbursed after the revocation of the banking licence.

“This forum thus provides us the opportunity to clarify these issues and other related ones in practical terms. The forum is thus a critical channel of empowering depositors and the general public with knowledge of how their funds are protected.”

Highlighting NDIC’s strengthened protection framework, he stated, “Consequently, depositors of deposit money banks, mobile money operators, and non-interest banks are now insured up to N5m, while depositors of microfinance banks, primary mortgage institutions, and payment service banks are covered up to N2m.

“This means that in the event of a bank failure, depositors are promptly paid to the insured limit, while depositors with account balances in excess of the insured limit are paid the initial insured sum, with the remaining balances paid as liquidation dividends upon the realisation of the bank’s assets and recovery of debts owed to the bank. This expanded coverage protects about 99 per cent of depositors in Nigeria.”

He added that the corporation has improved payout processes and urged depositors to ensure their Bank Verification Number is properly linked to their accounts to facilitate seamless access to insured deposits.

Delivering the opening remarks, Director of Asset Management Department, Patricia Okosun, said the theme of the meeting, ‘Strengthening Depositors’ Confidence in NDIC’s Role in Financial System Stability and Consumer Protection,’ reflects the corporation’s commitment.

She said, “At its core, the NDIC exists to protect the savings of bank customers in the event of bank failure. In simple terms, when a bank fails, the NDIC steps in to ensure that depositors are paid their insured sums promptly, while also working to recover additional funds as liquidation dividends for those with funds above the insured limit.

“This safety net is designed to give depositors confidence that their hard-earned money saved in the bank is protected.”

She added that the town hall provides “a direct and interactive platform for engagement with diverse stakeholder groups” and helps clarify misconceptions about deposit insurance and the role of the NDIC.

Okosun further explained that the initiative is part of a broader stakeholders’ engagement programme being implemented across selected locations.

Providing an overview of the engagement, Head, Communication & Public Affairs Department, Hawwau Gambo, said recent developments in the banking sector made sustained engagement necessary.

She stated, “Recent developments in the Nigerian banking sector, including the revocation of operating licences of some banks by the Central Bank of Nigeria and NDIC’s payment of their depositors, coupled with increased public debate and conversations about the recapitalisation efforts of banks, have reinforced the need for sustained stakeholder engagement.

“These developments, while necessary for financial system stability, have also heightened public interest, and in some instances, misconceptions, rumours, and so on about what is going on in the banking sector and indeed the deposit insurance system.

“The corporation considers it imperative to proactively engage stakeholders to provide clarity, build trust, and strengthen depositor confidence.”

She added that the programme features presentations on depositor protection, responsibilities of bank customers and financial prudence, alongside evaluation tools to assess awareness levels and measure impact.