The Nigeria Deposit Insurance Corporation, NDIC, has urged Nigerians to keep more of their money within the formal banking system, pointing to the increase in maximum deposit insurance coverage for Deposit Money Banks from ₦500,000 to ₦5 million as an important safeguard for customers.
Assistant Director in the Communication and Public Affairs Department of the NDIC, Adegbenga Fabuyi, made the call at the 2026 Finance Correspondents Association of Nigeria, FICAN, conference and 36th anniversary in Lagos.
Fabuyi said stronger depositor protection was particularly important as Nigeria implements reforms intended to strengthen banks and build a financial system capable of supporting a substantially larger economy.
The NDIC’s official figures confirm that increasing the maximum coverage for Deposit Money Banks from ₦500,000 to ₦5 million provides full insurance coverage for 98.98 per cent of DMB depositors, up from 89.20 per cent under the previous limit.
However, the distinction between the number of depositors covered and the value of deposits insured is important.
The ₦5 million ceiling does not mean all deposits in the banking system are fully guaranteed. NDIC’s figures show that the revised limit covers 25.37 per cent of the total value of DMB deposits, compared with 6.31 per cent previously.
Confidence Critical to Recapitalisation
Fabuyi linked deposit protection to Nigeria’s banking recapitalisation programme, arguing that larger capital bases alone cannot create a resilient financial system without depositor confidence.
He said banks need customers to remain confident that funds placed with regulated financial institutions are protected within the statutory insurance limits.
That relationship is particularly important because bank capital and customer deposits perform different functions.
Fabuyi stressed that the fresh capital being raised under recapitalisation should not be confused with deposits available for ordinary lending.
Banks largely intermediate funds mobilised from depositors when providing credit to households and businesses.
The NDIC official consequently urged banks, regulators and the media to intensify public education on the safety mechanisms available within the regulated banking system.
NDIC Warns Against Keeping Cash at Home
Fabuyi expressed concern that some Nigerians continue to store significant sums outside regulated financial institutions, including in homes and other informal locations.
Such funds can be exposed to theft, fire and other forms of permanent loss.
By contrast, deposits in eligible CBN-licensed institutions automatically fall within the NDIC framework up to the applicable maximum coverage limit.
The NDIC says depositors do not need to register separately or pay fees to obtain this protection. Eligible deposits with CBN-licensed institutions are automatically insured.
The Corporation operates as a statutory risk minimiser, with responsibilities that include deposit guarantees, supervision, distress resolution and liquidation of failed institutions.
Coverage Differs Across Institutions
Another important clarification is that the ₦5 million maximum does not apply identically to every category of financial institution.
NDIC currently provides maximum coverage of ₦5 million for DMB depositors, while eligible deposits in Microfinance Banks, Primary Mortgage Banks and Payment Service Banks are generally covered up to ₦2 million.
Mobile Money Operator subscribers can receive pass-through insurance of up to ₦5 million per subscriber, subject to applicable conditions.
The distinction has become increasingly important as Nigerians move more of their financial activities onto digital platforms.
Fintech Expansion Changes Deposit Protection
Fabuyi said the NDIC was also supporting the expansion of digital finance by providing protection for eligible deposit-taking arrangements within the regulated financial ecosystem.
The growth of mobile payments, fintech platforms and digital banks has changed how millions of Nigerians interact with financial services.
But digital convenience does not eliminate the need for depositor protection.
The NDIC’s pass-through framework, for example, is designed to identify the underlying subscribers whose money is held in qualifying pooled accounts rather than treating the pooled balance as belonging entirely to the mobile money operator.
That allows qualifying individual subscribers to receive protection up to the applicable maximum rather than limiting insurance to a single pooled account.
Media Has Role in Financial Confidence
Fabuyi also identified financial journalists as important partners in explaining banking reforms.
He said reporting on recapitalisation, deposit insurance and fintech regulation must help the public understand not only what policies have changed but what those changes mean for their money.
The message is particularly relevant following recent bank failures. In July, NDIC began verifying depositors following the Central Bank of Nigeria’s revocation of the licences of 46 microfinance banks.
Such cases demonstrate why deposit insurance exists.
For the NDIC, the objective is therefore not simply persuading Nigerians to put more money into banks. It is ensuring that greater participation in formal finance is supported by effective supervision, clearly understood insurance limits and confidence that depositors have a defined safety net when an insured institution fails.
