NDIC’s Premium Contribution Pool Exceeds N1tr
Premium contributions by insured financial institutions in the country, under the supervision of the Nigeria Deposit Insurance Corporation (NDIC) have risen to N1.07 trillion, according to the compilation of separate figures obtained by The Guardian.
Premium contribution forms a major component of the resources available to a deposit insurer (NDIC), which strengthens its capacity to meet obligations, particularly timely reimbursement of depositors, when adequate and well-maintained.
The nation’s deposit insurer maintains three of such insurance funds – the Deposit Insurance Fund (DIF) for the Deposit Money Banks (DMBs); the Special Insured Institutions Fund (SIIF) for Microfinance Banks (MFBs); and Primary Mortgage Banks (PMBs); and the Non-Interest Deposit Insurance Fund (NIDIF) for Non-Interest Banks (NIBs).
Analysis of the figures showed that DIF pool rose to N959.55 billion as at December 31, 2017, against N849 billion in the same period of 2016, representing an increase of 13.02 per cent, but lower than the 14.10 per cent increase recorded between 2015 and 2016.
The SIIF also rose by 22.6 per cent, from N93.3 billion in 2016, to N114.39 billion in 2017, while the NIDIF grew by 61.8 per cent, from N428 million in 2016, to N693 million in 2017.
The Managing Director and Chief Executive Officer, NDIC, Umar Ibrahim, said one of the key challenges was the delay in the passage of the proposed amendment to the NDIC Act 2006, which impaired the ability of the corporation to effectively perform some of its mandate.
He said the proposed amendments are in harmony with international best practices and provisions of the Revised IADI Core Principles for effective deposit insurance systems.
“Also, there was the challenge of wrongful execution of judgement against NDIC’s assets for liabilities of banks in-liquidation, as well as slow recovery of debts owed to failed insured institutions.
“The implementation of the Fiscal Responsibility Act 2007, which requires the NDIC to remit 80 per cent of its operating surplus to the Consolidated Revenue Fund (CRF) Account, inhibits the growth of the General Reserve Fund and was equally a challenge in 2017,” he said.
Meanwhile, the Corporation’s operating income increased by 19.34 per cent, from N122.68 billion as at December 31, 2016, to N146.487 billion same period in 2017.
Total Operating Expenses, including provisions for insurance losses, decreased by 15.74 per cent from N93.6 billion as at December 31, 2016, to N63.55 billion a year after, resulting to a net surplus of N82.935 billion in the period under review.
Consequently, NDIC remitted N22.767 billion pre-audit to the Consolidated Revenue Fund (CRF) of the Federation as at December 31, 2017.
Ibrahim noted that the 2017 financial statements complied with the requirements of the relevant laws and standards of the International Financial Reporting Standard (IFRS) and that of the Financial Reporting Council (FRC) of Nigeria.