The Managing Director of the Nigeria Deposit Insurance Corporation (NDIC), Bello Hassan, has said that the federal government is working round the clock to ensure that there is safety in the financial system and that customers will not lose money in the event that any bank becomes insolvent.
Speaking Thursday during the 2021 NDIC retreat for members of the Senate Committee on Banking, Insurance and other Financial Institutions, with the theme “the Role of NDIC in Promoting Effective Advisory Framework in the Banking Sector,” Hassan said that the theme of the retreat is very topical particularly, in the light of current developments in the economy and the challenges presented by the complexity of the financial system.
He said: “Over and over again, government is keen to promote confidence in the financial system by putting in place financial safety net to promote financial stability and support economic growth and development. Deposit Insurance System is an important component of the financial safety net, in addition to prudential regulation, supervision and the lender of last resort function, which has been played by the Central Bank.
“The main objective of Deposit Insurance system is to compensate depositors in the event of banks failing to fulfill their obligations. The mechanism is an important means to get corporate public confidence in the banking system and achieve financial banking system stability, which is one of the most important elements of economic growth and development, especially in a developing economy like ours.
“Deposit Insurance system aims to achieve two main goals. The first goal is to ensure that depositors will not lose their deposits held in insured banks if they become insolvent and subsequently failed. “The second goal is to contribute to the stability of the financial system by building a general public confidence in the banking system. In recent years, the financial service sector has experienced significant transformation, largely driven by advances in information technology, globalization and consolidation. New services and products have emerged with new players. Fintechs have been challenging traditional service providers through faster, cheaper, reliable services.