NDIC Pays Between N2-5m To Depositors Of Liquidated Banks – MD

The Nigeria Deposit Insurance Corporation, NDIC, says, in line with existing laws, it pays between five million and two million naira as deposit guarantees to customers of liquidated commercial banks.

The Managing Director of NDIC,
Thompson Oludare Sunday, stated this during the agency’s 2026 budget defence before the House of Representatives Committee on Insurance and Actuarial Matters.

He was responding to a question from House spokesperson Akin Rotimi who asked how much depositors are entitled to receive when a bank becomes insolvent, citing the case of Heritage Bank, whose licence was revoked on June 3, 2024.

Mr Sunday said deposit guarantee is one of NDIC’s core mandates and is funded through premiums paid by banks.

He said the premium, previously fixed at 15/16 of one percent of total deposits, is now risk-based and generally below one percent.

“We do not collect all the deposits that banks receive.What we take is premium,” he said, adding that the scheme differs from conventional insurance because the premium is paid by banks, not depositors.

He said the insured limit stands at five million naira for deposit money banks, primary mortgage banks and mobile money operators, and two million naira for microfinance banks.

According to him, once a banking licence is revoked and the NDIC is appointed liquidator, insured sums are paid automatically.

Using depositors’ Bank Verification Numbers, the corporation traces alternative accounts and credits funds without requiring customers to visit NDIC offices.

“Anything within the insured limit is paid without you having to come,” he said.

For balances above the insured threshold, Sunday said the corporation realises assets of the failed bank including buildings, equipment and investments and aggressively pursues debtors to recover outstanding loans. Proceeds from those recoveries are paid as liquidation dividends.

He disclosed that on Jan. 6 the NDIC paid a second tranche of liquidation dividends totaling 24.63 billion naira to depositors of Heritage Bank, noting that recovery efforts are ongoing.
Committee

Chairman Ahmed Jaha Babawo commended the clarification, saying it addressed public misconceptions that the NDIC covers all deposits without limit.

He noted that the insured coverage was recently increased from 500,000 naira to five million naira per depositor and said more than 90 percent of Heritage Bank depositors received their insured amounts within four days of the bank’s closure, in compliance with international deposit insurance standards.

Babawo added that further discussions on liquidation dividends would be held in an executive session.

Oduyemi Odumade, Edited By Grace Namij