The Nigeria Deposit Insurance Corporation (NDIC) has warned that the Federal Government’s 50 percent cost‑to‑income ratio policy is hampering its ability to build a strong financial buffer to protect depositors. Managing Director/Chief Executive Thompson Sunday acknowledged that the NDIC complies with the policy, but the required deductions limit its capacity to maintain a robust Deposit Insurance Fund.
During a courtesy visit to Dr Armstrong Takang, Managing Director/Chief Executive of the Ministry of Finance Incorporated (MOFI), in Abuja, Sunday emphasized the NDIC’s commitment to fiscal and financial regulations, including the Fiscal Responsibility Act 2007. He noted that the corporation submits its financial statements ahead of statutory deadlines and meets its remittance obligations, paying either 20 percent of gross earnings or 80 percent of net surplus to the Federal Government.
However, Sunday cautioned that the 50 percent cost‑to‑income ratio imposes operational constraints, restricting the NDIC’s ability to respond promptly and effectively to bank failures without relying on government support. Maintaining a solid Deposit Insurance Fund is essential to the NDIC’s role as a key safety‑net agency that protects depositors and sustains confidence in the banking system. Consequently, the NDIC is seeking an exemption from the policy, citing international standards under the Core Principles for Effective Deposit Insurance, which require deposit insurers to hold adequate funds.
Sunday described MOFI as a critical stakeholder, given the Federal Government’s 40 percent equity stake in the NDIC, and stressed the need for continued collaboration to ensure the corporation meets its obligations to the government while safeguarding depositors’ funds. In response, Takang praised the NDIC’s collaborative spirit and compliance with fiscal regulations, assuring that MOFI would continue to engage the Federal Ministry of Finance on the NDIC’s behalf. Both institutions reaffirmed their commitment to cooperation, transparency and accountability.
The 50 percent cost‑to‑income ratio policy, introduced in December 2023, aims to improve revenue mobilization and fiscal discipline across ministries, departments and agencies. The NDIC’s concerns highlight the need for a balanced fiscal approach that ensures financial system stability while supporting the effective operation of key agencies such as the NDIC.
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