Following the recent review of its Differential Premium Assessment System (DPAS) Framework, the Nigeria Deposit Insurance Corporation (NDIC) has sought input from critical stakeholders towards making the document more robust and all embracing.
The Differential Premium Assessment System Framework was reviewed to make it more risk sensitive and account for significant developments that had taken place in the Nigerian banking system since its adoption in 2008.
In a release by the Director, Communication and Public Affairs Department of the NDIC, Bashir Alhassan Nuhu, said the review was informed by the need to ensure that the framework conforms to the recommendations of the International Association of Deposit Insurers (IADI) and other global best practices.
Bashir said now that the review is at the consultation stage, the Corporation must solicit input from its critical stakeholders, adding that the exposure draft has been placed on the Corporation’s Website, www.ndic.gov.ng for review.
He urged stakeholders to forward their input, comments and recommendations to NDIC Director, Insurance and Surveillance Department on [email protected] latest by 30th June 2023.
The NDIC adopted the Differential Premium Assessment System (DPAS) in 2008 following the issuance of its framework in 2007 to differentiate premiums payable by Insured Financial Institutions based on their respective risk profile.
The DPAS aimed at introducing fairness into the premium assessment process, 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 was also introduced to enable banks in the lower risk categories to 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.