Depositors’ funds: Senate approves amendments to strengthen NDIC

The Senate on Tuesday approved new amendments to the Nigeria Deposit Insurance Corporation (NDIC) Act, further strengthening the independence of the corporation to perform its core mandate of protecting depositors’ funds.

The report on the amendment bill, “Nigeria Deposit Insurance Corporation Act, 2023 (Amendment) Bill, 2024”, secured the endorsement of senators after the clause-by-clause consideration on that floor in Abuja.

The bill was sponsored by the Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Sen. Mukhail Adetokunbo-Abiru (APC, Lagos-East), the same committee that made the recommendations on thr new changes for approval.

Speaking on the amendments, while giving a synopsis of the report, Sen. Adetokunbo-Abiru said, “The Nigerian Deposit Insurance Corporation (Amendment) Bill, 2024, is thus a critical piece of legislation aimed at strengthening the Nigerian financial system.

“The proposed amendments will enhance the NDIC’s capacity to safeguard depositors, ensure the stability of financial institutions, and promote trust in the banking system.

“Given the rapidly evolving nature of the financial sector, this bill represents a timely response to the challenges and opportunities that lie ahead.”

Among the amendments is the transfer of the power of the Central Bank of Nigeria (CBN) to recommend the appointment of the Managing Director (MD) of the corporation and members of the board of directors.

The power, according to new clauses, shall now be directly performed by the President of Nigeria.

The report states, “The principal Act also curiously restricts the President’s power to appoint the Managing Director and Executive Directors and provides that they are to be to persons recommended by the Central Bank of Nigeria Governor.

“The bill seeks to amend this provision to bring it in line with and in consonance with Mr President’s power of appointment as enshrined in the Constitution of the Federal Republic of Nigeria 1999 (as amended).”

Also reviewed is the power conferred on the Permanent Secretary, Ministry of Finance, to be the chairman of the NDIC’s board.

The report says, “The provisions of the principal Act which makes the Permanent Secretary, Ministry of Finance the Chairman of the Board is also being reviewed.

“This is because the workload and busy schedule of that office is such that makes such appointments untenable.

“The importance of the need for the Minister of Finance to constitute an Interim Management Committee for the Corporation within 30 days after the expiration or termination of the tenure of the Board is also introduced in the bill.

“This is to forestall the recent situation where the Corporation faces challenges in its operations as a result of the absence of a board.”

The Senate observed that the public hearing on the bill generated interest and had participation from large sections of the financial services sector.

According to the report, “Over Thirty (30) written memoranda and numerous oral submissions were received.

“All the written memoranda and oral presentations at the hearing supported the bill.”