The Nigerian Deposit Insurance Corporation has frowned at the high cost of operations imposed by commercial banks on their customers.
The Managing Director, NDIC, Alhaji Umaru Ibrahim, told The Point that the extra cost of generating power through generating plants has been transferred to customers who are made to pay through their nose.
He added that the effect of this was high interest rate and exorbitant Cost of Transaction, among others.
“This discourages some of the people, who ordinarily should be captured into the banking system,”Ibrahim said.
While reacting to the crashed Mavrodi Mundial Movement, otherwise known as Ponzi schemes, the NDIC boss said there was nothing the corporation could do for the victim as a regulator.
“We warned Nigerians earlier, and we told them the danger in it. NDIC would not relent in calling on Nigerians, sensitising and enlightening them on the dangers of patronising wonder banks and ponzi schemes. But we would continue to educate the public,” he said.
Specifically, he said it is worrisome to note that despite repeated advice, many unsuspecting members of the public are still falling victims to the mouthwatering interest being offered by these illegal fund managers.
“For the avoidance of doubt, these illegal funds managers or ‘wonders banks’ are neither licensed by the CBN nor under the NDIC deposit insurance coverage. Members of the public are therefore advised to patronise only banking institutions that display the NDIC sticker: ‘Insured by NDIC’ in their banking halls or entrances.” Ibrahim said.
Explaining the efforts made by the NDIC towards poverty reduction and economic empowerment, he said being part of the financial safety net, the Corporation contributed to poverty reduction as it focused on deposit guarantee and protection of depositors’ interest.
“As at December, 2015, the Corporation’s insurance coverage was over 90 per cent of the 67 million depositors in deposit money banks whose deposit liabilities amounted to N17.5 Trillion while the total sum of N165.5 billion belonging to 8.4 million depositors of microfinance banks and N73.71 billion belonging to 0.73 million depositors of primary mortgage banks were also covered by over 95 per cent,” he said.
