Senate okays NDIC Bill to protect for bank depositors

The Senate passed the Nigeria Deposit Insurance Corporation (NDIC) Act No. 33 of 2023 on Tuesday.

This legislation aims to strengthen the NDIC’s ability to protect depositors, ensure the stability of financial institutions, and enhance public trust in the banking system.

Sponsored by Senator Mukhail Adetokunbo Abiru (Lagos East) and supported by the Senate Committee on Banking, Insurance, and Other Financial Institutions, the bill underwent thorough discussion before its third and final reading.

During the plenary session, Senator Abiru presented the committee’s report, highlighting that the bill aims to empower the NDIC by safeguarding its independence and aligning its operations with contemporary practices.

Key amendments include consolidating the President’s authority to appoint the NDIC board members and transitioning the Central Bank of Nigeria (CBN) to a supervisory role rather than a recommended one. This shift is expected to enhance the NDIC’s focus on bank examinations and overall regulatory efficiency.

Abiru noted that while the 2023 Act improved upon the previous 2006 legislation, its implementation had faced ongoing challenges and calls for further amendments.

“The proposed amendments are crucial for strengthening Nigeria’s financial system,” he stated. “They respond to both the challenges and opportunities in the rapidly evolving financial landscape.”

The bill addresses concerns raised about the independence of the NDIC, particularly regarding the appointment of the Managing Director and Executive Directors.

The 2024 amendments seek to clarify the President’s constitutional authority in these appointments, removing any ambiguities present in the principal Act.

Additionally, the bill includes provisions for the Minister of Finance to establish an Interim Management Committee within 30 days following the end of a board’s tenure, preventing operational disruptions faced previously by the NDIC.

Senator Abiru emphasized the broad consensus among stakeholders about the critical role of the NDIC in protecting depositors and ensuring financial stability.

He mentioned that over 30 written memoranda and numerous oral submissions supported the bill, reflecting widespread backing for the proposed reforms.

With the passage of this legislation, the NDIC is poised to operate more effectively, safeguarding the interests of depositors and reinforcing confidence in Nigeria’s banking sector.