The Federal Government has identified the protection of depositors as a critical element necessary for maintaining and restoring financial stability in Nigeria.
The Minister of Finance, Budget and National Planning, Zainab Ahmed who stated this at the International Association of Deposit Insurers (IADIAfrica Regional Committee (ARC) workshop, in Abuja, noted that despite the global economic challenges that also affected the nation, no depositors’ fund was lost due to the effectiveness of financial institutions like CBN and the NDIC.
According to the Minister, Nigeria has been able to boost the confidence of depositors during such critical times through; the Nigeria Deposit Insurance Corporation’s array of public enlightenment programmes, in the efficient supervision of insured institutions to promote sound risk management.
Also speaking at the event, Managing Director, NDIC, Bello Hassan, highlighted the roles of the Deposit Insurance System in the protection of depositors in the event of bank failure.
Hassan acknowledged that the fabric of global financial stability is constantly being threatened by one form of crisis or the other, with current potential threats to financial stability, such as the Russia-Ukraine war, cyber threats , slow growth, increasing inflation and tighter global financial conditions, which he noted may exacerbate pre-existing vulnerabilities.
The NDIC Boss advised that a system-wide approach to crisis management, involving collaborative efforts of the financial safety-net participants and regional deposit insurance systems would be required to stabilise turbulent banking systems.
Noting that competent, well-informed professional and skilled staff are critical to effective execution of a deposit insurance mandate, Hassan expressed hope that participants will be better equipped to discharge their functions as deposit insurers at the end of the workshop.
For her part, Board Chairman of NDIC, Mrs. Ronke Sokefun harped on the need for robust cooperation to ensure financial system stability and growth of the global economy.
According to Sokefun, it is imperative to keep working through forums like the IADI to strengthen supervisory tools, monitor the effectiveness of insured institutions’ as well as to ensure readiness for timely, and prompt intervention to engender financial system stability.
She reiterated the Corporation’s commitment towards a sustainable system that could detect problem early enough and manage crisis adequately in the banking system to foster.
The theme for this year’s ARC Workshop “Normality in Turbulent Periods: The Stabilizing Role of Deposit Insurance” seeks to enhance global financial system stability and strengthen financial safetynet mechanisms to protect depositors.
It is also expected that at the end of the workshop, strategies for system-wide crisis preparedness and resolution options in promoting financial stability in the region would emerge.
Participants at the 3-day event include global experts from both fiscal, monetary, supervisory and regulatory agencies, and Deposit Insurers across the globe.
