On Thursday, an Amendment Bill aimed at ensuring the autonomy and independence of the Nigeria Deposit Insurance Corporation (NDIC) successfully passed its second reading in the Senate.
The sponsor of the bill, Senator Mukhail Adetokunbo Abiru, representing Lagos East senatorial district, noted that the bill seeks to amend the principal Act of 2006 in accordance with Section 1 (3).
During the deliberation on the bill’s general principles, Senator Abiru emphasized on the inadequacy of the current provisions of the Act.
He added that bolstering the autonomy and independence of the NDIC is crucial for enhancing its effectiveness in safeguarding depositors’ funds and maintaining stability in the banking sector.
According to him, “The proposed amendment aims to address existing gaps and strengthen the regulatory framework governing the operations of the NDIC. By ensuring greater autonomy and independence for the corporation, the bill seeks to empower it to fulfill its mandate more effectively and efficiently”.
However, te bill’s advancement to the next stage of legislative scrutiny underscores the Senate’s recognition of the importance of enhancing the NDIC’s capacity to carry out its regulatory functions.
And as the legislative process continues, further deliberations and consultations are expected to refine the proposed amendments and ensure that they align with the objectives of promoting financial stability and protecting depositors’ interests.
Speaking on the red hollowed chamber of the National assembly, Abiru added “The envisaged amendment would be make the Corporation more effective in discharge of its mandates”.
The bill which is co-sponsored by all the 42 members of the Senate Committee on Banking, Insurance and other financial institutions was read the first time in the hallowed chamber on Wednesday 22nd November, 2023, Which basically seeks to amend the Nigeria Deposit Insurance Corporation Act No 63 of 2023 to make the Corporation more effective, safeguard its independence and autonomy and to bring it in line with current realities and best practices.”
Abiru further disclosed that the NDIC was set up primarily to protect depositors and to guarantee the settlement of insured funds when a deposit-taking financial institution can no longer repay their deposits.
“Though the 2023 Act made substantial improvements to the 2006 Act, its implementation has been fraught with continuous debates and there have been 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.
Whereas Section 1 (3) of the Act provides that “The Corporation shall be independent in the performance of its functions” nearly all of its important and exclusive duties, functions and powers are to be exercised subject to the concurrence of the Central Bank of Nigeria (CBN).
The above provisions make the Act self-contradictory and this bill is therefore amending the principal Act to guarantee NDIC’s independence in performing its statutory functions” he said.
The amended bill however got a unanimous support from other majority senators, stating categorically that the amendment will prevent interference in the functions of the NDIC.