NDIC partnering CBN to tackle potential risks in banking sector – MD

The Nigeria Deposit Insurance Corporation (NDIC) has said it is partnering with the Central Bank of Nigeria (CBN) to proactively address potential risks within the banking system.

The Managing Director, NDIC, Mr Bello Hassan made the disclosure at a retreat for lawmakers with the theme, “Deepening Deposit Insurance Knowledge for Effective Legislative Functions.’’

While noting that the Nigerian banking sector had exhibited resilience despite facing economic difficulties, Hassan said that addressing such risks would be through collaboration and enhanced supervision, aiming to maintain a safe and sound banking system in Nigeria.

The retreat was 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.

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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 remains 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.”

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 essences 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.