The Nigeria Deposit Insurance Corporation (NDIC) has requested an exemption from the Federal Government’s 50 per cent cost-to-income ratio policy, warning that the directive limits its ability to build a strong financial buffer to protect depositors.
The Managing Director and CEO of NDIC, Mr. Thompson Sunday, said while the corporation complies with the policy, the deductions reduce its capacity to maintain a robust Deposit Insurance Fund, which is crucial for responding effectively to bank failures without relying on government support.
Speaking during a courtesy visit to the Managing Director of the Ministry of Finance Incorporated (MOFI), Dr. Armstrong Takang, Sunday reaffirmed NDIC’s commitment to transparency and statutory obligations, including the remittance of 20 per cent of gross earnings or 80 per cent of net surplus to the Federal Government. He emphasized that international standards, including the Core Principles for Effective Deposit Insurance, require deposit insurers to maintain adequate funds to safeguard the financial system.
Sunday described MOFI as a critical stakeholder, noting the Federal Government’s 40 per cent equity stake in NDIC and underscoring the importance of continued collaboration to balance statutory obligations with the need to protect depositors’ funds. Takang commended NDIC’s compliance and assured continued support in engaging the Federal Ministry of Finance on the corporation’s behalf.
The 50 per cent cost-to-income ratio policy, introduced via a circular on December 28, 2023, requires federal agencies and parastatals to remit half of their internally generated revenue to the Treasury Single Account. The policy aims to enhance revenue mobilisation and fiscal discipline but, according to NDIC, poses operational constraints that could undermine its financial stability and ability to respond to banking crises.
