Depositors of 15 out of the 42 Primary Mortgage Banks (PMBs), risk their deposits as their mortgage institutions are yet to meet their premium obligations, the Nigeria Deposit Insurance Corporation has said.
The Managing Director of Nigeria Deposit Insurance Corporation (NDIC), Umar Ibrahim, made the disclosure at the second sensitisation workshop for primary mortgage banks by the NDIC with the theme ‘Implementing Differential Premium Assessment System (DPAS) in PMBs in Nigeria’.
Primary Mortgage Institutions (PMIs) are expected to pay 8/16 of 1per cent (i.e. 50 basis points or 0.05per cent) of their certified deposit liabilities for the preceding year as premium for deposit insurance to the NDIC.
It is mandatory for licensed PMIs to insure their total deposit liabilities with the NDIC with the exception of insider deposits (i.e. deposits belonging to board members, management and staff), deposits used as collaterals and such other deposits the Board of NDIC may exempt from time to time.
The new coverage level represents an increase of 250per cent over the earlier coverage level of N200,000.
The NDIC has developed and deployed a framework for financial assistance for PMBs so as to promptly intervene and assist the PMBs to overcome temporary liquidity problems. Supervision of PMBs is jointly carried out by both CBN and NDIC.
Investigation revealed that, the failure of the PMBs to pay up their premium may exclude them from the window of the NDIC for financial and or technical assistance depending on the peculiar situation of the insured institution.
Financial assistance could be in form of interest-bearing loans that must be paid back on stated terms, while technical assistance could take the form of advisory services, restructuring, staff training or take-over of management.
A depositor in an insured microfinance bank and Primary Mortgage Institution does not pay premium to the corporation. The insured MFB and PMI pay through annual assessments on their deposit liabilities. The premium paid is held as Special Institutions Insurance Fund (SIIF) by the corporation.
NDIC obtained the approval of the minister of finance on August 4, 2016 for the deployment of DPAS in computing the deposit insurance premium of PMBs to encourage market discipline.
Recently, the NDIC reduced the deposit insurance premium rate from 40 to 35 basis points to all Deposit Money Banks (DMBs) to further contribute to the financial system stability and promote public confidence in the banking sector.
Depositors of 15 out of the 42 Primary Mortgage Operators (PMBs), risk their deposits as their mortgage institutions are yet to meet their premium obligations, the Nigeria Deposit Insurance Corporation has said.
The Managing Director of NDIC, Umar Ibrahim, made the disclosure at the second sensitisation workshop for primary mortgage banks by the NDIC with the theme ‘Implementing Differential Premium Assessment System (DPAS) in PMBs in Nigeria’.
Primary Mortgage Institutions (PMIs) are expected to pay 8/16 of 1% (i.e. 50 basis points or 0.05%) of their certified deposit liabilities for the preceding year as premium for deposit insurance to the NDIC.
It is mandatory for licensed PMIs to insure their total deposit liabilities with the NDIC with the exception of insider deposits (i.e. deposits belonging to board members, management and staff), deposits used as collaterals and such other deposits the Board of NDIC may exempt from time to time.
The new coverage level represents an increase of 250% over the earlier coverage level of N200,000.
The NDIC has developed and deployed a framework for financial assistance for PMBs so as to promptly intervene and assist the PMBs to overcome temporary liquidity problems. Supervision of PMBs is jointly carried out by both CBN and NDIC.
Investigation by Daily Trust revealed that, the failure of the PMBs to pay up their premium may exclude them from the window of the NDIC for financial and or technical assistance depending on the peculiar situation of the insured institution.
Financial assistance could be in form of interest-bearing loans that must be paid back on stated terms, while technical assistance could take the form of advisory services, restructuring, staff training or take-over of management.
A depositor in an insured microfinance bank and Primary Mortgage Institution does not pay premium to the corporation. The insured MFB and PMI pay through annual assessments on their deposit liabilities. The premium paid is held as Special Institutions Insurance Fund (SIIF) by the corporation.
NDIC obtained the approval of the minister of finance on August 4, 2016 for the deployment of DPAS in computing the deposit insurance premium of PMBs to encourage market discipline.
Recently, the NDIC reduced the deposit insurance premium rate from 40 to 35 basis points to all Deposit Money Banks (DMBs) to further contribute to the financial system stability and promote public confidence in the banking sector.
• Daily Trust
