The Nigeria Deposit Insurance Corporation (NDIC) has said that it is partnering with the Central Bank of Nigeria(CBN) to proactively address potential risks within the banking system.
While noting that the Nigerian banking sector had exhibited resilience despite facing economic difficulties, the Managing Director, NDIC, Mr Bello Hassan, said that addressing such risks would be through collaboration and enhanced supervision, aiming to maintain a safe and sound banking system in Nigeria.
He disclosed this at a stakeholders retreat, organised by the corporation for the Senate Committee on Banking, Insurance and other Financial Institutions in Lagos.
The conference with the theme, “Deepening Deposit Insurance Knowledge for Effective Legislative Functions,’’ was well-attended by senators and other stakeholders. The retreat is aimed at exposing the lawmakers to the NDIC laws, with a view to identifying impediments to the implementation of its mandate as well as brainstorming with the management of the corporation on the way forward.
The NDIC MD maintained that various measures are being put in place by the corporation and the CBN to ensure the banking sector remains sound.
“NDIC is collaborating with the Central Bank to supervise these banks and there are a lot of measures that are being put in place to ensure that we heighten our surveillance during this period, to ensure that the quality of the risk assets remain very robust.
“As we speak, the non-performing loan ratio is below the maximum threshold set by CBN and we want to ensure that we stay within that limit.
“So, various measures are being put in place to heighten supervision, to make sure that we don’t run into a situation whereby the quality of assets will deteriorate within the banking system and to ensure that the banks continue to remain safe and sound,’’ he said.
The Chairman, Senate Committee on Banking, Insurance and other Financial Institutions, Mr Mukhial Abiru, who said the lawmakers would support the NDIC in its oversight functions, lamented that the depreciation of the Naira has had an impact on the balance sheets of banks.
“We are very mindful locally here as there has been serious depreciation in the value of our currency. And of course, you know, that has an impact on the balance sheet of the banks as some of them would have grown without the kind of depreciation we have seen.
“To that extent, the role of the NDIC is very important. Yes, we know that the bank’s ratios are very good today, their liquidity ratio is very good and our understanding is that the average is about 41 per cent when the required minimum is about 30 per cent.
“Their capital adequacy, too, is very strong. We have also heard that the CBN is about to recapitalise the banks.
“So, it also means that we as legislators, we must understand even the role the regulators are playing and that is one of the essence of why we are here and you can see the turnout of members of the Senate Committee on Banking Insurance and other financial institutions,” he said.
Abiru expressed support for the apex bank’s recent policies for stabilising the exchange rate, while emphasizing the critical need to combat inflation for long-term economic stability.
He said that the policies by the CBN have shown some initial success, leading to a slight strengthening of the Naira.
