The Chairman, Senate Committee on Banking, Insurance and other Financial Institutions, Senator Mukhail Adetokunbo Abiru, FCA (Lagos East), today on the floor of the Senate, led the debate on a bill for an Act to amend the Nigeria Deposit Insurance Corporation Act No 63 of 2023 that will make the Corporation more effective, safeguard its independence and autonomy, bringing it in line with current realities and best practices.
Senator Abiru who sponsored the bill, alongside 42 Senators, who are members of his Committee, explained that though the 2023 Act made substantial improvements to the 2006 Act, according to him, its implementation has been fraught with continuous debates and there have been series of appeals and consensus among stakeholders on the need for an amendment of the Act to address all the issues that have been raised concerning it.
The essential amendments being proposed include, ensuring true independence for the Corporation in accordance with the intents of the drafters of the Act. He said, “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.”
Also, the restriction of the President’s power to appoint the Managing Director and Executive Directors, stating they must be persons recommended by the Central Bank of Nigeria Governor, as contained in the principal Act will also be amended. The new bill seeks to amend this provision to bring into in line with and in consonance with Mr. President’s power of appointment as enshrined in the Constitution of the Federal Republic of Nigeria 1999 (as amended).
Speaking further on other sections and clauses that will be amended, Abiru continued, “The 2023 Act terminated geo-political representation on the Board of the Corporation but the Bill seeks to reintroduce it. The importance of the duties and functions of the Corporation viz a viz the need for inclusivity taking into cognizance the diversity of the nation requires that geo political representation in the board is restored. In addition to harnessing the diversity of the nation and engendering inclusivity, the geo-political spread also helps with the dissemination of information of the activities of the Corporation.
“The provisions of the principal Act which makes the Permanent Secretary, Ministry of Finance the Chairman of the Board is also being reviewed. This is because the workload and busy schedule of that office is such that makes such appointments untenable. This may not engender effective oversight of the affairs of Corporation as is required for an organization that plays such an important role in the financial services sector.
“In the same vein, the reasoning for the Director-General of the Securities and Exchange Commission being a member of the Board and the Interim Management Committee is also being addressed. This is as SEC is the regulator of the capital market and has nothing to do with deposit insurance.
“The importance of the need for the Minister of Finance to constitute an Interim Management Committee for the Corporation within 30 days after the expiration or termination of the tenure of the Board is also introduced in the bill. This is to forestall a recurrence of the recent situation where the Corporation faced challenges in its operations as a result of the absence of a board.” The bill was thereafter read the second time, and referred to the Committee on Banking, Insurance and other Financial Institutions, to report back in two weeks.
