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Questions and Answers
What is one of the public policy objectives of the NDIC?
What does the NDIC Act establish the Corporation as?
What is the key function of the NDIC according to the text?
What amount does the NDIC guarantee to pay depositors of failed licensed DMBs?
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When does the Corporation's obligation to make payment crystalize?
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Which entity in Nigeria is responsible for implementing the Deposit Insurance System?
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How does the Corporation carry out supervision of insured institutions?
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What is the main purpose of banking supervision carried out by the Corporation?
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What responsibility does the Corporation have in terms of failing insured institutions?
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In case of bank liquidation, what role can the Corporation play?
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Who owns the Corporation according to the provided text?
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What priority are depositors given in case of bank liquidation?
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Study Notes
NDIC Overview
- One public policy objective of the NDIC is to protect depositors and promote confidence in the financial system.
- The NDIC Act establishes the Corporation as a statutory body responsible for ensuring the stability of the banking sector.
Key Functions and Responsibilities
- A key function of the NDIC is to provide deposit insurance to depositors of licensed Deposit Money Banks (DMBs).
- The NDIC guarantees up to 500,000 NGN to depositors of failed licensed DMBs.
- The Corporation's obligation to make payment crystallizes when a licensed DMB is declared insolvent by the Central Bank of Nigeria (CBN).
Implementation and Supervision
- The Deposit Insurance System in Nigeria is implemented by the NDIC.
- The Corporation carries out supervision of insured institutions through regular audits and risk assessments.
Banking Supervision Purpose
- The main purpose of the banking supervision carried out by the Corporation is to safeguard depositors' funds and promote sound banking practices.
Handling Failing Institutions
- The Corporation has the responsibility to intervene in failing insured institutions to protect depositor interests.
- In case of bank liquidation, the NDIC can act as a liquidator and ensure orderly disbursement of funds to creditors.
Ownership and Prioritization
- The Corporation is owned by the Federal Government of Nigeria.
- In the event of bank liquidation, depositors are given priority over other creditors when it comes to the distribution of remaining assets.
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Description
Test your knowledge on the public policy objectives of the Nigeria Deposit Insurance Corporation (NDIC) which include protecting depositors, contributing to financial system stability, and enhancing public confidence in case of financial institution failures.
