NDIC Seeks Inputs To Differential Premium Assessment System Framework

The Nigeria Deposit Insurance Corporation (NDIC), at the weekend called for stakeholder inputs into its recent reviewed Differential Premium Assessment System (DPAS) Framework to make it more risk sensitive.
A statement by Bashir Alhassan Nuhu, its Director, Communication and Public Affairs Department, said the DPAS adopted in 2008 was aimed at introducing fairness into the premium assessment process, while encouraging effective risk management practices in insured institutions and applying a risk differential approach in the deposit insurance premium assessment of insured financial institutions.
It adoption followed the issuance of its framework in 2007 to differentiate premiums payable by Insured Financial Institutions based on their respective risk profile.
The DPAS, Nuhu said, was also introduced to ensure banks in the lower risk categories pay relatively lower premium rates, charge banks in the higher risk categories additional premium for their extra risks, incentivise regulatory compliance and mitigate moral hazard.
The DPAS Framework, he stressed, accounts for significant developments that had taken place in the Nigeria banking system since its adoption in 2008, while ensuring that it conforms to the recommendations of the International Association of Deposit Insurers (IADI) and other global best practices.
Bashir noted that with the review at consultation stage, it is imperative for the corporation to solicit input from its critical stakeholders, following which the exposure draft has been placed on the corporation’s website for review.
NDIC, therefore, urged stakeholders to forward their input, comments and recommendations to its Director, Insurance and Surveillance Department latest by June 30, 2023.