Senate Passes Bill to Bolster Nigeria Deposit Insurance, Protect Depositors’ Funds

The Nigerian Senate has taken a significant step to safeguard depositors and promote trust in the country’s banking system by passing a bill to enhance the Nigeria Deposit Insurance Corporation (NDIC).

The Senate passed the bill on Tuesday, October 29, during its plenary.

Senator Adetokunbo Abiru (APC-Lagos), who sponsored the bill titled “The Nigeria Deposit Insurance Corporation Act 2023” said the bill aims to strengthen the country’s financial system.

According to him, the amendment of the NDIC bill will not only ensure the safety of depositors’ funds but also the stability of financial institutions and promote trust in the banking sector.

Abiru said, “The Nigerian Deposit Insurance Corporation (Amendment) Bill, 2024, is a critical piece of legislation aimed at strengthening the Nigerian financial system.

“The proposed amendments will enhance the NDIC’s capacity to safeguard depositors, ensure the stability of financial institutions, and promote trust in the banking system.

“Given the rapidly evolving nature of the financial sector, this Bill represents a timely response to the challenges and opportunities that lie ahead.”

He added that the bill seeks to empower the corporation by guaranteeing its independence in performing its statutory functions per Section 1 (3) of the principal Act.

“The principal (2023) Act restricts the President’s power to appoint the Managing Director and Executive Directors, requiring recommendations from the Central Bank of Nigeria Governor.

“The 2024 bill now seeks to align this provision with the President’s appointment powers as enshrined in the Constitution of the Federal Republic of Nigeria 1999 as amended.

“The Act’s provision that makes the Permanent Secretary, Ministry of Finance, the Chairman of the Board is also under review due to the demands on that office.

“Furthermore, the bill introduces a requirement for the Minister of Finance to constitute an Interim Management Committee for the Corporation within 30 days after the Board’s term expires or is terminated.

“This is to prevent challenges in the Corporation’s operations caused by the absence of a board.”

The bill, which received the support of all members, was approved following the Senate Committee on Banking, Insurance, and Other Financial Institutions’ report review.