seeks inputs from stakeholders
Following the recent review of its Differential Premium Assessment System (DPAS) framework, the Nigeria Deposit Insurance Corporation (NDIC) has sought inputs from critical stakeholders towards making the document more encompassing.
In a statement by the Director, Communication and Public Affairs Department, Bashir Alhassan Nuhu, the NDIC said DPAS was reviewed to make it more risk-sensitive and account for significant emerging developments in Nigeria’s banking system since its adoption in 2008.
Bashir said the review was informed by the need to ensure that the framework conforms to the recommendations of the International Association of Deposit Insurers (IADI) and other global best practices.
He said since the review is at the consultation stage, it was important to solicit input from its critical stakeholders, adding that the exposure draft is on the Corporation’s website, www.ndic.gov.ng, for review. The release urged stakeholders to forward their inputs, comments and recommendations to NDIC Director, Insurance and Surveillance Department at aliyuam@ndic.gov.ng on or before 30th, June 2023.
NDIC adopted 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.
DPAS aims 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.
The DPAS was also introduced to enable banks in the lower-risk categories to pay relatively lower premium rates. With the framework, banks in the higher risk categories are charged an additional premium for their extra risks. It incentivises regulatory compliance and mitigates moral hazard.
