Major Boost for Depositors’ Reimbursement as NDIC and NIBSS Set to Sign MoU

In a significant development for the banking sector, the Nigeria Deposit Insurance Corporation (NDIC) and the Nigeria Inter-Bank Settlement System (NIBSS) Plc. are poised to sign a Memorandum of Understanding (MoU) that aims to streamline the reimbursement process for depositors in the event of bank failures.

This announcement was made by NDIC’s Managing Director/Chief Executive, Mr. Thompson Oludare Sunday, during a courtesy visit from the NIBSS Executive Management team, led by Managing Director/Chief Executive Mr. Premier Oiwoh, at the NDIC Head Office in Abuja.

Mr. Sunday commended the longstanding partnership with NIBSS, recognizing its crucial role in reinforcing the Corporation’s mission to protect depositors and bolster public confidence in the banking system. He underscored the importance of NIBSS’s contributions, particularly in implementing the Bank Verification Number (BVN) platform, which facilitated seamless payments to alternate accounts of depositors affected by the recent closure of Heritage Bank.

“You have been a reliable partner, and NDIC remains committed to that partnership,” Mr. Sunday stated. “Without NIBSS’s support, achieving the milestones we realized during the impromptu closure of Heritage Bank would have been a daunting task. This is why formalizing our collaboration through this MoU is critical.”

The MoU will cover several key areas to enhance depositor reimbursement, including:

• Real-Time Synchronization: Allowing NDIC’s deposit registers and electronic records to facilitate rapid verification of eligible accounts during bank resolution.
• Expanded Disbursement Channels: Incorporating Mobile Money Operators (MMOs) and possibly creating an NDIC-branded mobile interface for greater accessibility.
• Investment in Infrastructure: Utilizing Single Customer View (SCV) systems and interoperability frameworks for immediate validation in case of bank failures.

Mr. Sunday praised NIBSS for its innovations in the payments sector, which have positioned Nigeria ahead of many countries globally. He acknowledged the platform’s efforts to mitigate financial fraud, calling them laudable.

In his response, Mr. Premier Oiwoh expressed gratitude for the strong collaboration with NDIC, which has been key to enhancing payment system security over the years. He reaffirmed NIBSS’s commitment to supporting NDIC’s mandate for depositor protection.

“The importance of prompt and efficient reimbursement during bank failures cannot be overstated,” Mr. Oiwoh remarked. “The NDIC’s initiatives in this arena significantly contribute to public trust and financial inclusion.”

He assured that NIBSS is working closely with law enforcement agencies to strengthen the safety of the nation’s payment systems, aiming to reduce the cost of transactions across its platforms.

The upcoming MoU between NDIC and NIBSS is expected to usher in a new era of technology-driven depositor reimbursement processes, significantly enhancing confidence in Nigeria’s financial safety-net framework.