CAN BANKS OFFER INSURANCE PRODUCT IN NIGERIA

The business of insurance in Nigeria is governed by the insurance act of 2003 and regulated by the National Insurance Commission (NAICOM) which was established pursuant to the National Insurance Commission Act 1997.

The license for commercial banks is issued by the Central Bank Of Nigeria in accordance to Banks and Other Financial Institution Act 2020.
The license states that banks should offer services which includes accepting of deposits, giving loans, facilitating foreign exchange and facilitating international transactions etc.


Every bank is expected to deposit a reserve with the central bank, this sum covers only activities stated in their license which includes accepting deposits and offeting loans.

SO WHY DO BANKS ENGAGE IN INSURANCE

Banks do this to obtain a higher cash balance and also to have the ability to offer more loans. Banks are engaged in the business of liquid cash and the higher the cash they have, the more likely they are able to meetup their financial obligations.




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