NDIC seeks stakeholders’ inputs for review of its framework

Nigeria Deposit Insurance Corporation (NDIC) is seeking inputs from critical stakeholders to make its Differential Premium Assessment System (DPAS) Framework more robust and all-embracing after its recent review. Bashir Alhassan Nuhu, the Director, Communication and Public Affairs Department in NDIC, said the DPAS was being reviewed to make it more robust and risk sensitive. He said the DPAS accounted for significant developments that had taken place in the Nigeria banking system since its adoption in 2008. Nuhu said the review was informed by the need to ensure that the framework conformed to the recommendations of the International Association of Deposit Insurers (IADI) and other global best practices.

He said now that the review was at the consultation stage, it was imperative for the Corporation to solicit inputs from its critical stakeholders. He said the exposure draft had been posted on the Corporation’s Website for review. The NDIC urged stakeholders to forward their inputs, comments and recommendations to NDIC Director, Insurance and Surveillance Department latest by 30th June 2023 “The NDIC adopted the Differential Premium Assessment System (DPAS) in 2008 following the issuance of its framework in 2007 to differentiate premiums payable by Insured Financial Institutions based on their respective risk profile. 

“The DPAS was aimed at introducing fairness into the premium assessment process, encouraging effective risk management practices in insured institutions and applying a risk differential approach in the deposit insurance premium assessment of insured financial institutions. “The DPAS was also introduced to enable banks in the lower risk categories to pay relatively lower premium rates, charge banks in the higher risk categories additional premium for their extra risks, incentivise regulatory compliance and mitigate moral hazard,” the NDIC said.