Senate passes NDIC bill to protect bank depositors’ fund

The Senate passed a bill on Tuesday aimed at bolstering the Nigeria Deposit Insurance Corporation (NDIC)’s capacity to protect depositors’ funds and reinforce the stability of Nigerian financial institutions.

The bill, titled “Nigeria Deposit Insurance Corporation Act 2023,” was adopted following a report by the Senate Committee on Banking, Insurance, and Other Financial Institutions and sponsored by Senator Adetokunbo Abiru (APC-Lagos) along with all committee members.

Presenting the report, Abiru highlighted that the bill would enhance NDIC’s effectiveness, reinforce its autonomy, and align it with global standards. Key provisions consolidate the President’s power to appoint the NDIC Board’s Chairman and members, shifting the Central Bank of Nigeria (CBN) to a supervisory role over the corporation.

According to Abiru, the amended act emphasizes the NDIC’s role in bank examinations, strengthening the institution’s capacity to safeguard depositors and ensure financial stability. “The Nigerian Deposit Insurance Corporation (Amendment) Bill, 2024, is a critical step toward strengthening Nigeria’s financial system,” he noted. “These amendments aim to reinforce depositor protection and trust in the banking sector.”

The bill also amends the existing act to clarify the President’s authority to appoint the NDIC’s Managing Director and Executive Directors, aligning it with Nigeria’s constitution, while removing the Permanent Secretary of the Ministry of Finance as Board Chair due to scheduling demands.

A new clause requires the Finance Minister to appoint an Interim Management Committee within 30 days if the NDIC Board’s tenure expires or is terminated, aiming to prevent operational gaps.

The Senate acknowledged a consensus among stakeholders on the NDIC’s critical role in maintaining financial stability. Abiru added that revising the legal framework is essential to ensure NDIC’s independence and adaptability, particularly amid evolving challenges in global and domestic banking.

The bill seeks to keep the NDIC effective in protecting depositors’ interests and promoting confidence in Nigeria’s financial sector.