International Research Journal of Education and Technology

One of the problems that confront the banking sector (both in under-developed and developed countries) is the phenomenon of bank distress. No matter the cause or origin, once a bank starts showing signs of distress, the confidence of the customers of such bank gradually starts being eroded. There might even be a run on such bank (which worsens matters and) which eventually leads to total failure and liquidation. A run on a bank is a situation whereby most of the bank customers who deposited money with such a bank suddenly rush at a time to withdraw very substantial part (if not all) of their deposit. Since the bank operates on the principle that not all who deposited money with it will come to withdraw their deposit at the same time, a run on a bank creates a situation in which the bank will be unable to redeem its obligation to its customers, at other times, it might be that the fraud in the bank has reached such an alarming rate that the bank becomes insolvent. Even loan default in form of doubtful debt in such an alarming dimension is sufficient to generate "cracks" in the "walls" of the stability of a bank. There is therefore an acceptable need for an independent body like Nigeria Deposit Insurance Corporation (NDIC) to protect the interest of depositors and promote sound banking habit in which the confidence of depositors in the banking system is not shaky. This is because in the event of any bank failure, the depositors' fund is at stake. The entrepreneurs (in form of the directors and shareholders of the bank) are seriously affected. There is a setback in the economy as productivity is affected. The purpose of this research work is to look at the causes of bank failure in developing economy which Nigeria is one and to critically study the impact of the Nigeria Deposit Insurance Corporation (NDIC) in the Nigeria financial institution. The data used for this study was secondary data set which was collated from the Nigeria Deposit Insurance Corporation (NDIC) Annual Report and Statement of Accounts between 2014 and 2019. This research work also highlights the variables on which the data was collected, descriptive statistics, graphs or plots for individual variable of interest, model specification, parameters estimation techniques, correlation analysis and test of significance or contributions of the selected variables of interest.

Keyword: NDIC, Mean Premium Rate, Insurance Fund, Regression analysis, Correlation analysis