The Nigerian Senate has passed a bill that seeks to amend the Nigeria Deposit Insurance Corporation (NDIC) Act and give the corporation more independence and effectiveness.
The bill, sponsored by Senator Adetokunbo Abiru, the Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, aims to align the NDIC Act with the current realities and best practices in the banking sector.
Empowering the president
One of the major changes proposed by the bill is to empower the president of the federation to appoint the Managing Director and Executive Directors of the NDIC, without relying on the recommendations of the Central Bank of Nigeria (CBN).
According to Senator Abiru, this would ensure the NDIC’s independence and autonomy in the performance of its functions, which are currently subject to the concurrence of the CBN.
He said the bill would also bring the NDIC Act in line with the president’s power of appointment as enshrined in the Constitution of the Federal Republic of Nigeria.
Ensuring inclusivity and continuity
Another change proposed by the bill is to reintroduce geographical representation in the board of the NDIC, which was scrapped by the 2023 Act.
Senator Abiru said this would reflect the diversity of the nation and foster inclusivity, as well as help with the dissemination of information on the activities of the corporation.
He added that the bill would also review the provisions that make the Permanent Secretary of the Ministry of Finance the Chairman of the Board, and the Director-General of the Securities and Exchange Commission a member of the Board and the Interim Management Committee.
Senator Abiru said these provisions were outdated and impractical, given the workload and irrelevance of the affected government functionaries.
He also said the bill would mandate the Minister of Finance to constitute an Interim Management Committee for the NDIC within 30 days after the expiration or termination of the tenure of the Board, to avoid operational challenges.
Strengthening the corporation
Senator Abiru said the bill, which was co-sponsored by all the 42 members of the Senate Committee on Banking, Insurance and Other Financial Institutions, would correct the anomalies in the 2023 NDIC Act and strengthen the corporation to make it more effective.
He said the NDIC plays a vital role in ensuring the stability and soundness of the banking system, as well as protecting the interests of depositors and creditors.
He appealed to his colleagues to support the passage of the bill, which he said has no financial implication.
The bill was unanimously passed for a second reading by the Senate and referred to the Committee on Banking, Finance and Other Financial Institutions for further legislative action.
A positive step for the banking sector
The passage of the bill has been welcomed by stakeholders in the banking sector, who see it as a positive step towards enhancing the regulatory framework and improving the performance of the NDIC.
The bill is also expected to boost the confidence of depositors and investors in the banking system, as well as promote financial inclusion and economic growth in the country.
Source: Punch
