What is the Current Insured Limit and why is it limited to a Fixed Sum?
The insured limit is currently a maximum of ₦500,000 for
each depositor in respect of deposits held in each insured Deposit Money Bank
(including Non-Interest Banks) and Primary Mortgage Bank and ₦200,000 for
depositor in MFB in the same right and capacity.
The amount to be
reimbursed has to be defined. Limited coverage is to minimize moral
hazard through excessive risk-taking by bank management and depositors.
Unlimited coverage could constitute a perverse incentive for excessive
risk-taking.