NDIC’s deposit insurance scheme don’t cover bank directors, staff — NDIC

The Nigeria Deposit Insurance Corporation (NDIC), says its Deposit Insurance Scheme (DIS) does not cover insider deposits which are made up of deposits of banks’ directors and staff.

NDIC, in its official Twitter handle said on Wednesday that bank directors and staff not being covered in its DIS was to create incentive for them to manage their institutions in a safe and sound manner.

The Corporation said the decision was also to ensure good corporate governance practices and not to provide incentive for moral hazards.

NDIC in its handle also said that in the event of bank failure, insider deposits would only be paid after all insured deposits had been fully paid.

According to NDIC, deposit insurance is a system established by the government to protect depositors against the loss of their insured deposits.

The Corporation said that DIS was developed to protect uninformed small depositors from the risk of loss of their deposits.

It was also aimed at protecting the banking system from instability occasioned by runs and loss of depositors’ confidence. (NAN)