The Nigerian Senate recently passed the “Nigeria Deposit Insurance Corporation Act 2023,” a landmark bill designed to strengthen the Nigeria Deposit Insurance Corporation (NDIC) and better protect depositors’ funds. Sponsored by Senator Adetokunbo Abiru (APC-Lagos), the bill aims to modernize the NDIC, providing it with more independence, aligning it with global best practices, and increasing its effectiveness in overseeing financial institutions.
A key amendment consolidates the President’s power to appoint the NDIC’s Chairman and board members, a role previously influenced by the Central Bank of Nigeria (CBN). Under the new provisions, the CBN will concentrate on supervising the NDIC rather than participating in appointments. This change, along with the bill’s alignment with Section 1 (3) of the principal Act, is expected to enhance the NDIC’s autonomy.
The bill also addresses the appointment of the NDIC’s Managing Director and Executive Directors, streamlining the process to align with constitutional provisions and eliminating prior limitations. Additionally, the Permanent Secretary of the Ministry of Finance will no longer serve as Board Chairman due to the demanding nature of the role. In cases of board vacancies, an Interim Management Committee will now be established within 30 days to ensure seamless operations.
Senator Abiru emphasized the significance of the NDIC’s role in protecting depositors and maintaining financial stability. The consensus among stakeholders supported the amendments, acknowledging that an empowered and autonomous NDIC is vital for the banking sector, particularly in a dynamic financial landscape.
This bill marks a significant step toward a resilient financial system, bolstering depositor confidence and positioning the NDIC to navigate evolving challenges in both domestic and global banking environments.
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