NDIC May Extend Cover to Capital Market
- By Udo Onyeka
- Published November 21st, 2011
- News
- Unrated
The Nigeria Deposit Insurance Corporation (NDIC) is proposing to include the stock market in its coverage as a way of restoring confidence in the capital market and to protect small investors.
Alhaji Umaru Ibrahim, managing director, NDIC who gave this hint penultimate week in Lagos said that apart from preparation for extension of insurance cover to non-interest bearing banks, the corporation was looking at ways to extend its services to the capital market as it is done in some other jurisdictions, revealing that the corporation is studying the Brazilian example.
“NDIC has developed a draft framework that would enable it extend Deposit Insurance System (DIS) to non-interest bearing financial institutions that would be licensed in due course by the CBN. The corporation had also issued an Exposure Draft on Non-Interest Deposit Insurance Scheme (NIDIS) to all deposit money banks (DMBs) in the system.”
Ibrahim said that to achieve the desired and positive changes, the corporation is leveraging on a sustained cordial relationship with the CBN and other regulators and members of the Financial Services Regulation Coordinating Committee (FSRCC) that would make the changes possible such as the Securities and Exchange Commission (SEC), National Pension Commission (Pencom), National Insurance Commission (Naicom), Nigerian Stock Exchange (NSE) and Federal Ministry of Finance.
On the intention to cover the capital market, the NDIC managing director said the corporation would soon begin consultations with relevant agencies that would assist to make it scale both executive and legislative hurdles. He said the corporation has already set in motion the process of reviewing its Act to accommodate provisions that would enhance its effectiveness.
He said “the corporation, in collaboration with the CBN, is developing a framework for resolving problems of systemically important financial institutions (SIFIs) such that the use of public funds for their resolution would be minimized. The framework involves requirement for such SIFIs to develop the resolution which should include setting aside an amount on an annual basis, to take care of their resolution when such occurs and the requirement for maintaining larger capital by the SIFIs to serve as buffer to enhance their resilience to shocks.”
Further he said with NDIC’s membership of the International Association of Deposit Insurers (IADI) and other efforts at reinforcing cooperation and exchange between deposit insurance organizations of different countries, the corporation is well positioned to partake in the sharing and exchange of expertise and information on deposit insurance issues.
The NDIC boss said the exchange of expertise between the corporation and other deposit insurance organizations is beginning to rub-off on the activities of the corporation, hence are positive changes. He said the review of the coverage level is one of such positive developments.
Alhaji Umaru Ibrahim, managing director, NDIC who gave this hint penultimate week in Lagos said that apart from preparation for extension of insurance cover to non-interest bearing banks, the corporation was looking at ways to extend its services to the capital market as it is done in some other jurisdictions, revealing that the corporation is studying the Brazilian example.
“NDIC has developed a draft framework that would enable it extend Deposit Insurance System (DIS) to non-interest bearing financial institutions that would be licensed in due course by the CBN. The corporation had also issued an Exposure Draft on Non-Interest Deposit Insurance Scheme (NIDIS) to all deposit money banks (DMBs) in the system.”
Ibrahim said that to achieve the desired and positive changes, the corporation is leveraging on a sustained cordial relationship with the CBN and other regulators and members of the Financial Services Regulation Coordinating Committee (FSRCC) that would make the changes possible such as the Securities and Exchange Commission (SEC), National Pension Commission (Pencom), National Insurance Commission (Naicom), Nigerian Stock Exchange (NSE) and Federal Ministry of Finance.
On the intention to cover the capital market, the NDIC managing director said the corporation would soon begin consultations with relevant agencies that would assist to make it scale both executive and legislative hurdles. He said the corporation has already set in motion the process of reviewing its Act to accommodate provisions that would enhance its effectiveness.
He said “the corporation, in collaboration with the CBN, is developing a framework for resolving problems of systemically important financial institutions (SIFIs) such that the use of public funds for their resolution would be minimized. The framework involves requirement for such SIFIs to develop the resolution which should include setting aside an amount on an annual basis, to take care of their resolution when such occurs and the requirement for maintaining larger capital by the SIFIs to serve as buffer to enhance their resilience to shocks.”
Further he said with NDIC’s membership of the International Association of Deposit Insurers (IADI) and other efforts at reinforcing cooperation and exchange between deposit insurance organizations of different countries, the corporation is well positioned to partake in the sharing and exchange of expertise and information on deposit insurance issues.
The NDIC boss said the exchange of expertise between the corporation and other deposit insurance organizations is beginning to rub-off on the activities of the corporation, hence are positive changes. He said the review of the coverage level is one of such positive developments.
