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NDIC to introduce Islamic Deposit Insurance

By  Babajide Komolafe
The Nigeria Deposit Insurance Corporation (NDIC) is set to introduce Islamic Deposit Insurance (IID).
“Some of our staff will soon be going to Malaysia to acquire the necessary exposure on Islamic Deposit Insurance and Islamic Banking” Umar Ibrahim, Ag Chief Executive of the Corporation, said yesterday.

Meanwhile, the National Bureau of Statistics has announced a decline in inflation rate too 11 per cent in May from 12.5 per cent in April owing to weak consumer spending.

Consumers have curtailed spending after a debt crisis in the banking industry dried up lending last year.
A stable naira has also helped keep inflation subdued, leaving it between 11.6  – 12.5 per cent in every month since October.

Increased government spending may begin to push up inflation in the second half of the year.
Fielding questions from journalists at the risk based supervision training programme for NDIC examiners, Umar said that the Central Bank of Nigeria (CBN) has introduced Islamic banking, and issued operating license for such banking, the imperative for the Corporation to evolve the framework to insure depositors of such banks.

Such insurance, he said, is regard as Islamic Deposit Insurance, and it has been successfully practiced in Malaysia hence the need to send staff of the Corporation to study the Malaysian framework for operating it.

Addressing participants at the training, he said, “Developments in the nation’s banking system as a result of the global financial crisis and the recent deployment of the Risk Based Approach to Banking Supervision, has made this training programme for NDIC examiners imperative.
“You will agree with me that the Corporation has, over the years, demonstrated greater commitment to the training and re-training of its staff with a view to continuously enhancing their skills, keeping them highly motivated and competitive and creating value for the stakeholders which include the banking system.

“Towards this end, the corporation has continued to give special attention to such areas as – consolidated supervision, communication and report writing, risk management, IT capabilities, bank failure resolution and non-interest yielding banking deposit insurance

“The Corporation will continue to assist in resolving crisis in the nation’s banking industry with a view to protecting insured depositors, ensuring financial system stability and restoring public confidence in the system.

“To achieve these, our focus in NDIC in collaboration with CBN would be resolving the problems of the 10 intervened banks as well as that of the MFBs and PMIs.

“Also, we shall step up our debts recovery efforts by engaging more debt recovery agents, intensify an aggressive pursuit of court cases, as well as devise better and more efficient system of reaching out to depositors and the payment of both insured and uninsured deposits.

Also, we shall not relent on seeking more legal/enforcement powers to deal with erring bank directors and management. The effective and efficient pursuit of these deliverables, you will agree with me, is very critical to our continued relevance in the nation’s Financial Services Industry.”


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