NDIC releases framework for insuring non – interest banking deposits

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The Nigeria Deposit Insurance Corporation (NDIC) has developed a framework for insuring liabilities on non-interest banking deposits in the country. The development was sequel to the successful take-off of the non interest banking in Nigeria, through the current initiatives of Ja\’iz, Stanbic IBTC and Sterling banks. \r\nNon-interest banking deposits were hitherto not covered by NDIC\’s deposit insurance scheme. A non-interest banking model offers products, engages in trading, investments and commercial services without conventional interest charges. It is rather restricted to a profit and loss sharing formula on its products. \r\nThe non-interest deposits to be covered by the NDIC\’s deposit insurance scheme are safe keeping deposits (wadi\’ah); interest free deposits for investment (Qard); profit sharing/loss bearing deposits (mudarabah); profit and loss sharing deposits (musharakah); and any other deposit type that is non-interest based and approved by the Central Bank of Nigeria (CBN).

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