The senate has successfully passed a new bill aimed at bolstering the Nigeria Deposit Insurance Corporation (NDIC). This important legislation, known as the Nigeria Deposit Insurance Corporation Act No. 33 of 2023, was approved during its third and final reading on Tuesday.
The bill was sponsored by Senator Adetokunbo Abiru, representing the Lagos East constituency, along with the members of the Senate Committee on Banking, Insurance, and Other Financial Institutions.
During the session, Senator Abiru presented the committee’s detailed report, outlining the need for this legislative upgrade.
He said, “The Nigeria Deposit Insurance Corporation (Amendment) Bill, 2024, is a critical piece of legislation aimed at strengthening Nigeria’s financial system.
“The proposed amendments will enhance the NDIC’s capacity to safeguard depositors, ensure financial stability, and foster trust in the banking system.
“Given the rapidly evolving financial sector, this Bill represents a timely response to emerging challenges and opportunities.”
“To further empower the corporation by guaranteeing its independence in performing its statutory functions in line with Section 1 (3) of the principal Act.”
“The Principal (2023) Act restricts the President’s power to appoint the Managing Director and Executive Directors, providing that they must be persons recommended by the Central Bank of Nigeria Governor.
“The (2024) bill seeks to amend this provision to align it with the President’s constitutional power of appointment, as enshrined in the 1999 Constitution (as amended).”
Abiru further stated, “The provision in the principal Act making the Permanent Secretary of the Ministry of Finance the Chairman of the Board is also being reviewed.
“This is due to the workload and busy schedule associated with that office, which makes such appointments untenable.
“The bill introduces a requirement for the Minister of Finance to establish an Interim Management Committee for the Corporation within 30 days following the expiration or termination of the Board’s tenure.
“This provision is to prevent challenges in the Corporation’s operations due to the absence of a board.”
“Given the above, the consensus among stakeholders is that the legal framework must be reviewed.
“This will enable the Corporation to effectively fulfil its functions, safeguard its independence and autonomy, and align it with best practices.
“This is especially significant because the Corporation plays a vital role in protecting depositors and fostering confidence in the financial sector.
“The challenges evolving in both the global and domestic banking environments make it essential to amend the current law to keep pace with these developments and ensure the NDIC remains fit for purpose.”
