On Tuesday, March 3, 2026, the House of Representatives Committee on Insurance and Actuarial Matters has raised critical questions regarding the ₦5 million maximum insurance payout currently guaranteed to depositors of failed banks by the Nigeria Deposit Insurance Corporation (NDIC).
During the 2026 budget defense session, the Managing Director of the NDIC, Mr. Thompson Oludare Sunday, provided a detailed briefing on the corporation’s current payout structure and its efforts to safeguard the Nigerian banking public.
Depositors of Deposit Money Banks (DMBs), Primary Mortgage Banks (PMBs), and Payment Service Banks are guaranteed a maximum payout of ₦5 million.
Customers of microfinance banks and other financial institutions are covered up to ₦2 million.
The NDIC utilizes Bank Verification Numbers (BVN) to facilitate automatic payments to verified depositors up to the guaranteed limit, eliminating the need for physical visits to NDIC offices.
The query from the House, led by Spokesperson Hon. Akin Rotimi Jr., was prompted by public concern following the collapse of Heritage Bank in June 2024. Lawmakers sought to understand the fate of depositors whose balances far exceed the ₦5 million statutory limit.
In response, Mr. Sunday clarified that while the guaranteed sum is paid out immediately from the insurance fund, any balance exceeding the ₦5 million threshold is dependent on the “liquidation dividend.” This process involves the NDIC aggressively recovering debts, selling physical assets (such as office buildings), and realizing investments belonging to the failed institution.
“Anything above the guaranteed limit depends on recoveries,” Mr. Sunday explained, noting that the NDIC recently paid a second liquidation dividend of ₦24.63 billion to Heritage Bank depositors on January 6, 2026.
Committee Chairman, Hon. Ahmed Jaha Babawo, commended the NDIC for increasing the limit from the previous ₦500,000 to ₦5 million, noting that over 90% of Heritage Bank depositors received their insured sums within four days. This performance aligns with International Resolution Deposit (IRD) standards.
The Committee indicated that further discussions regarding the recovery of large-scale deposits and the status of ongoing liquidations would continue in an executive session.
The NDIC reaffirmed its commitment to maintaining financial stability and ensuring that no depositor is left without recourse, emphasizing that the risk-based premium system remains a robust buffer for the Nigerian financial ecosystem.
