The Senate Tuesday passed for third reading the Nigeria Deposit Insurance Corporation (NDIC) Act (Amendment) Bill, 2024.
The Bill, sponsored by Senator Adetokunbo Abiru (APC Lagos East), seeks to amend the Nigeria Deposit Insurance Corporation Act No 33 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 who in his capacity as Chairman of Senate Committee on Banking , Insurance and other Financial Institutions, presented report on the amendment bill , said the Nigerian Deposit Insurance Corporation (Amendment) Bill, 2024 will enhance the NDIC’s capacity to safeguard depositors, ensure the stability of financial institutions, and promote trust in the banking system.
He said: “Section 7 of the principal Act was amended to restore the President’s power to appoint the managing directors and executive directors. The president shall appoint the Chairman and other members of the board subject to the confirmation of the Senate.
“The principal Act restricted the President’s power to appoint the managing director and executive directors and provides that they are to be to persons recommended by the Central Bank of Nigeria Governor.
“The bill amended this provision to bring it in line with and in consonance with the President’s power of appointment as enshrined in the Constitution of the Federal Republic of Nigeria 1999 (as amended). It also makes provisions for the Chairman of the Corporation to be different from the permanent secretary.
“The Bill provides for an establishment of an Interim Management Committee for the Corporation within 30 days after the expiration or termination of the tenure of the Board by the Minister of Finance.
“This is to forestall the recent situation where the Corporation faces challenges in its operations as a result of the absence of a board.
“Section 25 was amended to increase the maximum amount payable to insured depositors upwards and also empowers the Corporation to vary the amount upwards from time to time taking into consideration the prevailing economic realities.
“The section stipulates that in the event of revocation of operating licence of an insured institution or actual suspension of payment to depositors of such insured institution, a depositor shall receive N5 million in the case of an insured institution other than a microfinance banks; and N2 million in the case of a depositor of microfinance bank up from N200,000. This payment shall be made in concurrence with the Central Bank.
“Section 62 of the principal Act was amended to provide that the Corporation have the power to succeed to all rights, titles, powers, and privileges of the insured institution, and of any shareholder, depositor, officer, account holder or director of such institution with respect to the institution and the assets of the institution provided the succession shall not include; monies received by the insured institution, application monies and other monies paid prior to allotment of shares or other securities.
“This is to ensure that proceeds of public offerings in the custody of intervened/failed banks should not be treated as deposits and co – mingled with other monies in the coffers of the bank for subsequent utilization by the NDIC in pursuance of its mandate”