NDIC to Adopts Indonesia Model to Boost Bank Liquidation, Crisis Response Framework

The Nigeria Deposit Insurance Corporation (NDIC) has taken a significant step toward strengthening Nigeria’s financial safety architecture following a high-level benchmarking visit to the Indonesia Deposit Insurance Corporation (IDIC), in a move aimed at adopting global best practices in deposit insurance and bank resolution.
The NDIC delegation, led by Executive Director (Operations), Dr. Kabir Sabo Katata, undertook the strategic visit as part of ongoing efforts to enhance institutional capacity and reinforce the resilience of Nigeria’s banking system amid evolving global financial risks.
During the engagement, both institutions held extensive technical sessions, resulting in what NDIC described as a “highly productive and mutually beneficial cross-fertilisation of ideas” on the effective implementation of Deposit Insurance Systems (DIS).
The discussions covered a broad spectrum of critical operational areas, including corporate governance frameworks, human capital development, digital transformation and information technology systems, bank supervision and financial system surveillance, as well as deposit insurance operations, bank resolution strategies, and liquidation processes.
A major highlight of the visit was Indonesia’s distinctive approach to bank liquidation. Unlike conventional methods, the Indonesian system leverages external liquidators, a model designed to improve transparency, efficiency, and professionalism in the winding down of distressed financial institutions.
Equally noteworthy is Indonesia’s policy mandating all banks—irrespective of their size or systemic relevance—to prepare and submit Recovery and Resolution Plans (RRPs). This forward-looking requirement ensures that financial institutions are better positioned to respond swiftly and effectively to potential crises, thereby reducing systemic risks.
The NDIC delegation also observed Indonesia’s well-structured annual crisis simulation exercises, which bring together all members of the financial safety net. These simulations are designed to test preparedness levels, enhance inter-agency coordination, and strengthen collective response mechanisms during periods of financial distress.
Industry analysts say such coordinated crisis management frameworks are increasingly critical in today’s interconnected global financial system, where shocks can quickly spread across borders.
For NDIC, the insights gained from the visit are expected to inform policy refinement and operational upgrades, particularly in the areas of early risk detection, crisis management, and efficient resolution of failing banks.
The Corporation reiterated its commitment to aligning Nigeria’s deposit insurance framework with international standards, noting that adopting proven global practices remains key to protecting depositors, sustaining public confidence, and ensuring long-term financial system stability.
The visit also underscores NDIC’s broader strategy of fostering international collaboration as a pathway to building a more robust, transparent, and crisis-resilient banking ecosystem in Nigeria.
NDIC explores global best practices in bank resolution and crisis management during a benchmarking visit to Indonesia, targeting stronger financial system stability in Nigeria.
NDIC benchmarks Indonesia’s deposit insurance system, adopting innovative strategies in bank liquidation, crisis simulation, and financial stability to strengthen Nigeria’s banking sector.