The Senate has passed a bill aimed at bolstering the Nigeria Deposit Insurance Corporation (NDIC), enhancing its capacity to protect depositors’ funds and ensure stability within financial institutions. This legislation is expected to promote confidence in Nigeria’s banking sector.
The approved bill grants the President the exclusive authority to appoint the Managing Director and Executive Directors of the NDIC, streamlining the appointment process by eliminating the requirement for recommendations from the Central Bank of Nigeria (CBN) Governor. While the CBN will retain its supervisory role over the corporation, the NDIC will benefit from increased autonomy.
Titled the “Nigeria Deposit Insurance Corporation Act No 33 of 2023,” the bill was sponsored by Senator Mukhail Adetokunbo Abiru from Lagos East and co-sponsored by 40 Senate members from the Committee on Banking, Insurance, and Other Financial Institutions.
Senator Abiru emphasized that the bill aligns the NDIC with current financial realities and best practices. It also introduces provisions for interim management, allowing the Minister of Finance to establish a temporary committee if a new board is not appointed within 30 days of a previous board’s term expiration.
“The NDIC Amendment Bill, 2024, is a vital piece of legislation aimed at strengthening Nigeria’s financial system,” Abiru remarked. He noted that the amendments are a critical response to evolving financial challenges, aiming to empower the NDIC to better protect depositors and foster trust in financial institutions.
Additionally, the legislation removes the provision that designated the Permanent Secretary of the Ministry of Finance as the NDIC Board Chairman, acknowledging the demands of that position.
Abiru highlighted a consensus among stakeholders regarding the need to update the NDIC’s framework to address contemporary challenges, ensuring it remains effective in its essential role in the financial sector. The bill received significant support, with over 30 written memoranda and multiple oral submissions during Senate hearings.
“This amendment ensures the NDIC can carry out its mandate of protecting depositors and stabilizing the financial system,” Abiru stated, calling it a positive step forward for Nigeria’s banking sector and overall economic growth.
