NDIC Boss Warns Nigerians Against Illegal Fund Managers, Wonder Banks

The Nigeria Deposit Insurance Corporation (NDIC) on Thursday in Enugu warned Nigerians against patronising illegal fund managers and operators of 'wonder banks' and other illicit investment schemes which promise extraordinary interest rates and profits.

The Managing Director of the corporation, Umaru Ibrahim, spoke during ‘NDIC Day’ at the ongoing 29th Enugu International Trade Fair in Enugu.

He lamented that despite several warnings by the corporation, countless number of Nigerians have continued to fall prey to the 'mouth-watering offers' of the ‘wonder bank’ operators which usually results in regrets.

He said the corporation had continued to caution the public on Crypto-Currencies, noting that in spite of their warnings, Nigerians have continued to lose fortunes and even their life savings to Ponzi scheme with disastrous consequences.

"Digital currencies do not belong to the category of currencies or coins issued by the Central Bank of Nigeria (CBN) or central bank of any other country. Secondly, digital currencies are not backed by any physical commodity, such as gold.  "Thirdly, digital currencies are also not deposits or instruments authorized by the CBN. Therefore, they are not insured by the NDIC," he explained.

The managing director who was represented by the Director, Strategy Development Department of the corporation, Mr. Festus Ekechi, said as a result of the licencing of non-interest banking institutions (NIBIs) and 21 mobile money operators (MMOs) by the CBN, the corporation had extended deposit insurance coverage to the depositors and subscribers of these banking products to the maximum limit of N500, 000 per depositor. 

According to him, the corporation had continued to be at the forefront of driving the key objective of the National Financial Inclusion Strategy (NFIS) to reduce the percentage of adult Nigerians that do not have access to financial services from 46.3 percent in 2010 to 20.0 percent in 2020.

The President of Enugu Chamber of Commerce Industries, Mines and Agriculture (ECCIMA), Emeka Udeze, had earlier observed that NDIC remained a life-line back-up for Nigerian teeming banking publics, who had hitherto suffered dearly in the past prior to the establishment of NDIC by losing all their deposits whenever crisis occur in the banking sector.

He therefore appealed to the CBN to reduce the pressure on NDIC through its regulatory framework by ensuring that the chances of bank failure were reduced to the barest minimum.