The Senate has approved a bill enhancing the Nigeria Deposit Insurance Corporation’s (NDIC) ability to safeguard depositors’ funds, ensuring stability in financial institutions and promoting confidence in Nigeria’s banking sector.
This bill grants the President the sole authority to appoint the Managing Director and Executive Directors of the NDIC, a move that aims to streamline appointments by removing the Central Bank of Nigeria (CBN) Governor’s recommendations in the process. The CBN will maintain its supervisory role over the corporation, while the NDIC will operate with increased autonomy.
The bill, titled the “Nigeria Deposit Insurance Corporation Act No 33 of 2023,” was sponsored by Senator Mukhail Adetokunbo Abiru (Lagos East) and co-sponsored by 40 Senate members from the Committee on Banking, Insurance, and Other Financial Institutions.
According to Abiru, the bill brings the NDIC in line with current financial realities and best practices. The bill also addresses the need for interim management, allowing the Minister of Finance to set up a temporary committee if a new board is not appointed within 30 days of a previous board’s term ending.
Abiru remarked that the amendments reflect a critical response to evolving financial challenges: “The NDIC Amendment Bill, 2024, is a vital piece of legislation aimed at strengthening Nigeria’s financial system. These changes will empower the NDIC to better protect depositors and foster trust in our financial institutions.”
Further, the legislation removes the provision making the Permanent Secretary of the Ministry of Finance the NDIC Board Chairman, considering the demands of that role.
Abiru noted the consensus among stakeholders on the importance of updating the NDIC’s framework to meet current challenges and to ensure the NDIC remains fit for its essential role in the financial sector. Over 30 written memoranda and multiple oral submissions at the Senate hearing supported the bill.
