Nigeria Deposit Insurance Corporation (NDIC) has said it has reviewed its financial and technical assistance framework and would be providing loans and assistance to specific banks that are in liquidity need due to the effects of the COVID-19 pandemic on the Nigerian economy.
Speaking at a workshop organised by NDIC for financial journalists in Kaduna State , the NDIC director, Insurance surveillance department, Galadima Gana, disclosed that the banking industry is still strong and well capitalised as average non-performing loans (NPLs) in the sector stood at six per cent slightly above the regulatory benchmark of five percent while average capital adequacy ratio (CAR) stood at 15 per cent.
He said that the average liquidity stood at 36 per cent as at September 30, 2020 indicating that banks in the country are liquid, adding that, loan to deposit ratio stood at 60 percent as against 65 per cent stipulated by the CBN.
“The condition of the industry is generally satisfactory. However, the impact of the pandemic had also led to a decline in credit facilities despite the increase in deposits during the period from March to June 2020. The regulatory and supervisory authorities have introduced measures to tackle the impact of the pandemic on the banking system with incentives such as interest rate reduction, moratorium, liquidity injection and regulatory forbearance on loan restructuring among others.
“Closer monitoring of banks and increased campaign on the safety of banks’ deposits through sustained public awareness and building of trust and confidence in the finances remain the key priorities of Regulators/ Supervisors.
Earlier in his address, the managing director and chief executive of the NDIC, Alhaji Ibrahim Umaru, said regulators in the Nigerian financial sector are considering using financial technology solutions for business processes such as Risk Based Supervision (RBS), Monitoring Compliance, Premium Administration, Early Warning Signals, Stress Testing, Analysis of insured institutions’ performance.
Umaru, who noted that the NDIC and the Central Bank of Nigeria (CBN) as well as the Nigeria Communication Commission (NCC) has produced a policy guideline for the registration, licensing and supervision of Fintech in the country, said the sector can help revolutionize the financial industry and achieve the financial inclusion goal.
“The emergence of fintech has its own solitary effect to the extent that it provide wide-ranging channels of financial intermediation through the enhanced used of technology, as you know very well you do not have to own a bank account and you do not have to go to any bank to transact any business using your mobile phones and other devices.
“This is what fintech can do for us and it can revolutionize the entire landscape; the banks see it as competition in some kind of distraction but at the same time, most smart banks have embraced them- some of them are having subsidiaries of fintech and some are in partnership with fintech so that we can broaden the scope of intermediation,” he pointed out.
