By Cynthia Alo
Following the completion of bank recapitalisation exercise, the Nigeria Deposit Insurance Corporation (NDIC) and the House of Representatives Committee on Insurance and Actuarial Matters have moved to strengthen Nigeria’s financial safety net to ensure prompt protection of depositors in the event of bank failures.
The move came as over 60 members of the House committee met with the NDIC, Wednesday, in Lagos to examine the implications of the recapitalisation exercise, and growing risks associated with fintech innovation.
Speaking at the stakeholders’ retreat with the theme, “Strengthening the Financial Safety Net in an Era of Banking Sector Recapitalisation and Fintech Innovation, Chairman of the committee, Ahmadu Jaha, said stronger bank capital must be matched with stronger supervision and effective depositor protection.
He said: “Stronger capital, however, must be complemented by stronger supervision, effective deposit insurance, sound corporate governance, enhanced crisis management arrangements, and improved coordination among members of the financial safety net.”
Jaha said the rapid expansion of financial technology had also created new risks requiring continuous legislative attention.
“Equally important is the rapid expansion of financial technology. While fintech innovation has significantly increased financial inclusion and payment efficiency, it also raises complex issues relating to cyber resilience, operational risk, consumer protection, digital fraud, and the scope of deposit insurance coverage,” he added.
Jaha, who represents Chibok, Damboa and Gwoza Federal Constituency, said lawmakers would provide legislative support and oversight to strengthen implementation of the banking sector recapitalisation programme.
He said the committee would also ensure that financial institutions lived up to expectations under the new recapitalisation policy.
According to him, the retreat was aimed at helping lawmakers understand the role of NDIC as one of Nigeria’s financial safety-net institutions, particularly in protecting depositors when banks fail.
“Whenever there is a failure in banking, that particular safety net mechanism can be applied immediately, and depositors can get their money as at when due,” he said.
Also speaking at the event,Managing Director and Chief Executive Officer of NDIC, Mr. Thompson Sunday, noted that the conclusion of the recapitalisation exercise on March 31, 2026, must be followed by stronger risk management, governance, and compliance across the industry.
“While recapitalisation enhances the resilience of financial institutions, it must be complemented by effective regulation, sound governance practices, strong risk management frameworks and good compliance culture, all attribute of a reliable financial safety net.”
Sunday said a strong and well-coordinated financial safety net was necessary to maintain public confidence, protect depositors and support orderly resolution of distressed financial institutions.
He added that NDIC would ensure prompt reimbursement of insured deposits when bank failures occurred and facilitate recovery of assets for uninsured depositors, creditors and shareholders.
He emphasized that NDIC relies heavily on the National Assembly to strengthen the legal framework supporting its core mandates, which include deposit insurance, bank liquidation, prudential regulation, and failure resolution.
“Our Act gives us four mandates, right? We do deposit guarantee or insurance, we do bank liquidation, we do prudential regulation and supervision with the CBN, and we also do failure resolution. Now, to do this, we depend on the committees of the National Assembly that have oversight powers over us,” he added.
The NDIC boss also said fintech growth had expanded financial inclusion but created new risks, including cyber threats, fraud, data breaches and operational vulnerabilities.
He said NDIC would continue to work with the CBN and other regulators to identify emerging risks and strengthen the resilience of the financial system.
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