Banking sector’s deposit insurance fund hits N614bn

The Nigeria Deposit Insurance Corporation on Monday said the Deposit Insurance Fund for the banking sector rose by N106.1bn or 20.88 per cent from N508.06bn in 2013 to N614.16bn at the end of last year.
The corporation stated in its 2014 Annual Report and Statement of Account for the banking sector that within the same period, the Special Insured Institutions’ Fund increased by 23.39 per cent from N57.71bn to N71.21bn.
The DIF was set aside to pay back the deposit of customers of Deposit Money Banks whenever there is a failure, while the SIIF was established to pay back deposits of customers of distressed Primary Mortgage Banks and Microfinance Banks.

A maximum insurance cover of N500,000 is applicable to depositors of the DMBs, while a maximum sum of N200,000 is applicable to those of MFBs and PMBs during liquidation.

The DIF and the SIIF are both funded by insurance payments made by the banks.
The report, which was obtained by our correspondent on Monday, stated that the corporation in 2014 reduced the base rate for insurance premium paid by the banks in order to reduce their burden as well as improve their risk profile.
This, it added, brought the maximum, minimum and mean rates paid by the banks for 2014 at 0.58 per cent, 0.40 per cent and 0.48 per cent, respectively, compared to 0.60 per cent, 0.45 per cent and 0.50 per cent in 2013.
In terms of coverage, the report stated that the deposit insurance coverage showed that there was a growth of 3.01 per cent in the total number of depositors of DMBs in the period under review.
For instance, the report noted that the number of depositors fully covered in the 23 DMBs increased by 3.05 per cent from 60,601,039 in 2011 to 62,447,952 in 2014.
It stated, “The deposit insurance coverage indicated that there was a growth of 3.01 per cent in the total number of depositors of the DMBs between ends of 2013 and 2014. Similarly, the number of depositors fully covered in the 23 DMBs increased by 3.05 per cent from 60,601,039 in 2011 to 62,447,952 in 2014.”
“As of December 31, 2014, the DIF stood at N614.16bn as against N508.06bn reported as of December 31, 2013. That was an increase of N106.10bn or 20.88 per cent over the 2013 figure. Similarly, the SIIF increased by 23.39 per cent from N57.71bn as of December 31, 2013 to N71.21bn as of December 31, 2014.”
Source: Punch