As part of efforts to boost public confidence in the banking system, the Nigerian Deposit Insurance Corporation (NDIC), has reassured depositors, especially small savers and traders, of their protection with compensation of up to N5 million in the event of a bank failure.

NDIC Head of Communication and Public Affairs, Mrs. Hawwau Gambo, gave the assurance at a recent public awareness event held at Wuse Market, Abuja, on Thursday.

Gambo emphasized the importance of saving money in banks licensed by the Central Bank of Nigeria (CBN), noting that only those banks insured by the NDIC guarantees deposit protection.

“We are here today to enhance public awareness about deposit insurance and how the NDIC protects the money of depositors in banks. Our focus is on reaching out to small savers and traders who may not be fully informed on how banking operates, to educate them on the dos and don’ts of banking, particularly how NDIC safeguards their money.

“First, we emphasize the importance of saving money in banks that are licensed by the CBN. Only those banks pay premiums to the NDIC, which means their depositors are covered by deposit insurance in the event that a bank fails.

“We let them know that, for commercial banks, depositors can get compensation ranging from N1 million up to N5 million, depending on their account balance. For microfinance banks and payment service banks, the coverage is between N1 million and N2 million. We hope this information builds their confidence to keep their money safely in banks,” she stated.

The Spokesperson further warned savers to exercise caution and only deal with verified agents to avoid falling prey to loan sharks.

Also speaking, Senior Manager, Communication and Public Affairs Department at NDIC, Alade Yetunde, added that the initiative is part of a pilot programme aimed at increasing financial literacy among Nigeria’s most vulnerable savers.

“We are focusing on small savers who may not fully understand how banking works. This awareness campaign teaches them how to save safely, where to save, and how to recover their funds should a bank fail,” she said. (Daily Sun)