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The Nigeria Deposit Insurance Corporation (NDIC) has warned Nigerians against placing their savings with unregulated financial institutions and illegal fund operators amid the continued spread of fraudulent investment schemes across the country.
The Managing Director and Chief Executive Officer of the Corporation, Thompson Sunday, issued the warning on Wednesday in Abuja during the NDIC Special Day at the 21st Abuja International Trade Fair.
Speaking on the fair’s theme, “Resilience: Trade, Taxation and the Economy,” Sunday said protecting depositors and maintaining confidence in the banking system remain important to Nigeria’s economic development ambitions, including the Federal Government’s target of building a $1 trillion economy by 2030.
NDIC warns against unrealistic investment returns
Addressing business stakeholders and other participants at the event, the NDIC chief urged Nigerians to be cautious of investment opportunities offering unusually high returns without appropriate regulatory oversight.
He expressed concern that individuals continue to place their savings in speculative schemes and unlicensed investment arrangements based on promises of returns that may not be sustainable.
“There are still Nigerians who keep substantial funds outside the formal banking system or entrust their savings to unlicensed fund managers, attracted by promises of extraordinary and unrealistic returns,” Sunday said.
He warned that the collapse of such schemes can result in significant financial losses for individuals and businesses, particularly where operators have no regulatory framework or deposit protection mechanism.
“The proliferation and collapse of Ponzi schemes have demonstrated, time and again, the enormous financial and emotional cost of placing hard-earned resources in unregulated schemes,” he said.
Sunday advised Nigerians to conduct appropriate checks before committing funds to any investment opportunity.
“If an investment promise sounds too good to be true, Nigerians should pause, ask questions and verify before committing their money,” he said.
NDIC highlights deposit protection
The NDIC chief contrasted the risks associated with illegal financial schemes with the safeguards available to customers of licensed deposit-taking institutions.
The Corporation serves as a deposit insurance and resolution institution within Nigeria’s financial system, providing protection to eligible depositors in insured institutions.
Sunday noted that the NDIC increased its maximum deposit insurance coverage limits following a policy enhancement in 2024.
Under the revised limits, depositors in Deposit Money Banks and Mobile Money Operators are covered up to N5 million per depositor, while the coverage limit for Microfinance Banks, Primary Mortgage Banks and Payment Service Banks stands at N2 million per depositor.
According to the NDIC, the revised limits provide full deposit coverage for more than 98 per cent of bank depositors nationwide.
The enhanced coverage is intended to reduce the impact of bank failures on households and small businesses while strengthening confidence in regulated financial institutions.
For deposits exceeding the insured limits, Sunday said the Corporation continues to distribute liquidation dividends from recoveries and proceeds from the disposal of assets of failed institutions.
Digital systems speed up depositor claims
The NDIC is also using digital infrastructure to improve the process through which depositors receive insurance payments following the closure of an insured institution.
Sunday said the Corporation has moved away from predominantly paper-based physical verification processes towards digital systems designed to accelerate claims processing.
Among the tools being used are the Single Customer View framework, Bank Verification Numbers (BVNs) and the Nigeria Inter-Bank Settlement System (NIBSS) payment infrastructure.
Through the systems, verified depositors can receive their insured funds within days of a bank closure, reducing the administrative delays traditionally associated with depositor verification and claims settlement.
The digital approach also allows the Corporation to improve the accuracy of depositor identification and streamline payments to eligible customers.
NDIC upgrades digital access for depositors
Sunday further announced the launch of an upgraded NDIC website featuring a digital portal intended to give depositors easier access to the Corporation’s services.
The platform includes a Quick Action Bar that allows users to initiate claims and check the status of banks, alongside an artificial intelligence-powered virtual assistant designed to provide real-time guidance.
The Corporation is encouraging depositors to ensure that their account information and BVNs are properly synchronised across financial institutions.
Accurate and consistent customer records can support the background verification process required when depositors seek insurance payments.
The NDIC’s warning comes as digital financial services and alternative investment platforms continue to expand, increasing the importance of distinguishing between regulated financial institutions and unlicensed operators.
For consumers, the Corporation’s message is that regulatory status, deposit protection and verification should remain key considerations before entrusting funds to any financial institution or investment operator.
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