The Nigeria Deposit Insurance Corporation (NDIC), says it is reviewing the framework for financial and technical assistance to support banks faced with liquidity and solvency during the pandemic.
Mr Galadima Gana, the Director, Insurance and Surveillance Department of the corporation, said this at the 2020 workshop for Finance Correspondents Association of Nigeria (FICAN) in Lagos on Tuesday.
Gana in a lecture titled: `The Actions & Impacts of COVID-19 on Resolution Authorities and Deposit Insurers’, said vulnerability of banks to illiquidity and insolvency grew with the pandemic.
He said the weakness of banks was due to the decrease in businesses and patronage and noted that regulatory and supervisory authorities introduced measures to tackle the impact of the pandemic on the banking system.
Gana said the measures include, incentives such as interest rate reduction, moratorium, liquidity injection and regulatory forbearance on loan restructuring, among others.
He rated the condition of the banking industry as generally satisfactory, adding, however, that the impact of the pandemic led to a decline in credit facilities.
The director stressed that the priority of financial regulators was to ensure a closer monitoring of banks and increased campaign on the safety of banks’ deposits through sustained public awareness.
In the same vein, Dr Sunday Oluyemi, the corporation’s Director of Research, Policy and International Relations, said the framework to mitigate the impact of the pandemic included health and social protection, monetary and fiscal policies.
Oluyemi said the target of the framework was to flatten the recession, human suffering and bankruptcy curves.
“It is difficult to quantify the full cost of COVID-19 pandemic across jurisdictions. The financial stability and policy responses are still evolving, a more coordinated approach globally is required to continually address the massive disruptions caused by the pandemic given the gradual reopening of economies. It is now pertinent more than ever before on the need for adjustments to policy measures to reflect authorities desire to enhance the effectiveness of existing measures in the light of experiences gained with the responses”.
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