The Nigerian Senate has passed a bill aimed at reinforcing the Nigeria Deposit Insurance Corporation’s (NDIC) ability to protect bank depositors, fortify the financial sector, and foster public trust in the banking system. The bill, titled the “Nigeria Deposit Insurance Corporation Act No 33 of 2023,” was brought forward by Senator Mukhail Adetokunbo Abiru (Lagos East) alongside the Senate Committee on Banking, Insurance, and other Financial Institutions.
Presenting the committee’s report on Tuesday, Abiru said the bill aims to bolster NDIC’s autonomy, streamline its operations, and align its regulatory powers with contemporary standards.
The act emphasizes the independence of the NDIC, transitioning the power to appoint the corporation’s board members to the President, with the Central Bank of Nigeria (CBN) assuming a primarily supervisory role over the institution.
Under the new legislative framework, the NDIC will be positioned to focus more intensively on bank examinations and address stakeholder concerns. Abiru noted that the 2023 NDIC Act had faced prolonged discussions and appeals for further amendments to enhance its implementation and close certain regulatory gaps identified over the years.
He stated, “The Nigerian Deposit Insurance Corporation (Amendment) Bill, 2024, is essential for strengthening the country’s financial system. This amendment will expand NDIC’s capacity to secure depositors, ensure the stability of financial institutions, and bolster public confidence in the banking sector.”
Senator Abiru also clarified that this new bill resolves discrepancies identified between the version signed by former President Muhammadu Buhari and the version approved by the 9th National Assembly. Furthermore, the amendment seeks to grant the President full authority to appoint NDIC’s Managing Director and Executive Directors, ensuring consistency with the Nigerian Constitution.
The amendment reconsiders the role of the Permanent Secretary of the Ministry of Finance as board chairman, due to the high demands of that office. Instead, the bill proposes a provision for the Minister of Finance to establish an interim management committee within 30 days following the board’s term expiration, addressing operational continuity concerns during transitions.
Senator Abiru stated that the NDIC’s fundamental role is to protect depositors by securing insured funds in the event of financial institution insolvency, contributing to overall financial system stability. The bill received extensive support during public hearings, with over 30 written memoranda and numerous oral presentations backing the amendment.
According to him, the proposed legal changes are pivotal as they allow the NDIC to adapt to both global and domestic banking developments. This ensures that the corporation remains equipped to handle evolving challenges and continues to play a critical role in safeguarding depositors and promoting confidence in Nigeria’s financial sector.