The Senate on Tuesday passed a bill seeking to amend the Nigeria Deposit Insurance Corporation, NDIC Act No. 33 of 2023, to strengthen the capacity of the corporation to safeguard depositors’ funds, ensure the security of financial institutions, and promote trust in the banking system.
This was sequel to the consideration of the report of the Committee on Banking, Insurance and Other Financial Institutions, chaired by Senator Adetokunbo Abiru (APC, Lagos East), during plenary.
Presenting the report, Senator Abiru said the bill would also make the NDIC more effective, safeguard its independence and autonomy and bring it in line with current realities and best practices.
According to him, the bill consolidated the power of the President to appoint the chairman and members of the board of NDIC while the Central Bank of Nigeria, CBN, which hitherto recommended to the appointees, would now concentrate on supervising the corporation.
NDIC, he added, based on the new amendment of its act, would focus on the examination of the banks.
Senator Abiru explained that though the 2023 Act made substantial improvements to the 2006 Act, its implementation has been fraught with continuous debates and there have been a series of appeals from and consensus among stakeholders on the need for an amendment of the Act to address all the issues that have been raised concerning it.
He 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.”
Senator Abiru informed that after the public hearing on the bill, the committee consulted widely and thereafter considered it necessary to incorporate the views and opinions of all the relevant stakeholders.
“On the whole, the inputs made on the proposed bill, as recommended by the committee for the approval of the Senate, will go a long way in strengthening the existing legal framework for deposit insurance.
“The Nigerian banking industry has undergone significant changes since the establishment of the NDIC. The emergence of digital banking, increased participation of non-bank financial institutions, and the growing complexity of financial transactions have raised the stakes and heightened the need for improved regulation.
“The global financial crisis of 2008 and the more recent economic challenges caused by the COVID-19 pandemic have highlighted the need for stronger financial safety nets.
“Given these circumstances, this amendment is necessary to ensure depositors’ confidence, promote stability in the financial sector and align the corporation and its functions with global best practices,” he stated.