The Nigeria Deposit Insurance Corporation and the Nigeria Inter-Bank Settlement System Plc are set to sign a Memorandum of Understanding aimed at ensuring a more efficient process of reimbursement for depositors in the event of bank failure.

According to a statement from the NDIC on Wednesday, the Managing Director/Chief Executive of the NDIC, Mr Thompson Sunday, disclosed this during a courtesy visit to the Corporation’s Head Office in Abuja by the NIBSS Executive Management team led by its Managing Director/Chief Executive, Mr Premier Oiwoh.

This proposed MoU comes a day after the NDIC commenced the liquidation process for two mortgage banks, Aso Savings and Loans and Union Homes Savings and Loans, whose licences were revoked by the Central Bank of Nigeria. NDIC said that depositors of the defunct banks will be paid their insured deposits of up to N2m per depositor, and those with deposits above N2m will be settled once the assets of the banks have been disposed of.

Speaking during the visit, the NDIC boss commended NIBSS for its longstanding partnership and invaluable contributions to strengthening the Corporation’s mandate of protecting depositors and enhancing public confidence in the banking system. He highlighted the pivotal role played by the NIBSS in driving digital verification processes, particularly through the deployment of the Bank Verification Number platform, which enabled seamless payment to the alternate bank accounts of depositors of the failed Heritage Bank Limited.

“You have been a reliable partner, and NDIC remains committed to that partnership. Without NIBSS’s support, it would have been difficult to achieve the milestone we attained with the closure of failed Heritage Bank despite the impromptu nature of the arrangement. That is why it is important for us to concretise our partnership through this MoU,” the NDIC MD/CE stressed.

Sunday highlighted key areas to be covered by the MoU, such as real-time synchronisation of NDIC’s deposit registers and electronic records to allow for swift verification of eligible accounts during bank resolution; expansion of disbursement channels for depositor claims to include Mobile Money Operators and a possible NDIC-branded mobile interface; and investment in Single Customer View and interoperability infrastructure for instant validation in the event of bank failure.

The NDIC boss also hailed NIBSS for reforming the payments system in Nigeria and putting it ahead of its peers in most parts of the world, adding that the efforts of the NIBBS platform in mitigating fraud in the financial system are laudable.

In his response, NIBSS’ Oiwoh expressed appreciation to the NDIC leadership for the sustained partnership that is geared towards a safer and smoother payment system in Nigeria over the years. He reaffirmed NIBSS’s full commitment to supporting the Corporation in the delivery of its mandate of depositor protection, emphasising that NIBSS exists to serve Nigerians and stands ready to provide the technological backbone required to enhance financial system stability.

Oiwoh emphasised the critical importance of prompt and efficient reimbursement during bank failures, noting that the NDIC’s efforts in this regard directly contribute to public trust and financial inclusion. He assured that his organisation is working closely with law enforcement agencies to proactively reinforce the safety of the nation’s payment system, as well as strengthen its infrastructure to lower the cost of transactions on its platforms.

The MoU between both institutions is expected to usher in a new era of digitised, responsive, and technology-driven depositor reimbursement processes, ultimately reinforcing confidence in Nigeria’s financial safety-net framework.