The History of DIB
Deposit Insurance was first introduced in the United States in 1933 following the Great Depression. Deposit Insurance has since been established in more than 100 countries, including Nigeria, Kenya, Zimbabwe, the United Kingdom, Canada, France, Japan, the Philippines, South Korea, and Taiwan.
In many countries, the main objective of the deposit insurance system has been to protect small depositors since most of them cannot cost-effectively analyze information on the financial institutions in which they deposit their money.
Deposit Insurance was first introduced in the United States in 1933 following the Great Depression. Deposit Insurance has since been established in more than 100 countries, including Nigeria, Kenya, Zimbabwe, the United Kingdom, Canada, France, Japan, the Philippines, South Korea, and Taiwan.
In many countries, the main objective of the deposit insurance system has been to protect small depositors since most of them cannot cost-effectively analyze information on the financial institutions in which they deposit their money.
The financial sector reforms of the 1990s recognized the importance of having a Deposit Insurance System in the country for the purpose of contributing to financial stability and public confidence in the financial system. Accordingly, the Banking and Financial Institution Act (BFIA), 1991 to allow private and foreign banks and financial institutions to operate under the market-driven principles and to establish a Deposit Insurance System in the country was enacted to establish Deposit Insurance Board (DIB) and the Deposit Insurance Fund (DIF).
The DIB which is responsible for policy formulation, management, and control of the DIF, started operations in 1994 as a pay box with an extended mandate. Like other deposit insurance institutions in the world, the main objective of DIB is to provide protection to small depositors against risks of losing their deposits arising from banks and financial institutions failures and thereby maintaining public confidence in the banking and financial system.
Following the repeal of the Banking and Financial Institution Act, 1991, the DIB continued to operate under the Banking and Financial Institutions Act No. 5 of 2006 which became operational in July 2006.