5 Functions of Nigeria Deposit Insurance Corporation and by extension outline its strides are given in this article. We do hope you find this helpful.
The Nigeria Deposit Insurance Corporation (NDIC) originates from a committee set up in 1983 by the Board of Central Bank of Nigeria (CBN), to critically investigate the operations of the banking system in Nigeria.
The Committee in its Report recommended the establishment of a Depositors Protection Fund which on implementation gave birth to the Nigeria Deposit Insurance Corporation.
Functions of the Nigeria Deposit Insurance Corporation
The Functions of the Nigeria Deposit Insurance Corporation include the following:
1. Being of Assistance to insured institutions in cases of financial difficulties
The Nigeria Deposit Insurance Corporation plays the role of giving necessary aid to insured institutions in the interest of depositors, especially in cases of imminent or actual financial difficulties of banks, particularly where suspension of payments is risked.
This is done to ensure that customers don’t lose confidence and trust in the banking system.
2. It works hard to ensure prompt payments to depositors, especially in cases of an inevitable or actual suspension of payments that were supposed to be made by the insured institutions up to the maximum as provided for in section 20 of this Act; this is in a way of ensuring a fair play in practice.
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3. Assisting monetary authorities in the formulation and implementation of policies so as to ensure sound banking practice and fair competition among insured institutions in the country.
This goes a long way to ensure that decisions made in the banking sector are properly guided and would be in the best interest of the sector.
4. It also helps to ensure all deposit liabilities of licensed banks and other financial institutions operating in Nigeria within the meaning of Sections 16 and 20 of this Act in order to engender confidence in the banking system of Nigeria. This is done to protect the customers and also assure them of quality service delivery.
5. Assists the federal government of Nigeria with good policymaking in the insurance sector
It is a major task of the Nigeria deposit insurance Corporation to assist the federal government in the formulation of policies to be adopted for the smooth running of the insurance sector of the economy.
Since the inception of the Nigeria Deposit Insurance Corporation, the Corporation has through its different units played a great role in the economy in line with its mandate. Such strides are commendable and of great value to nation-building.