By Henry Umoru

STAKEHOLDERS in the banking and insurance sectors have raised some concerns over a proposed bill that is aimed at amending the Nigeria Deposit Insurance Corporation (NDIC) Act No. 63, 2023.

The NDIC Act No. 63, 2023(Amendment) Bill, 2024( SB.277 when amended will enhance the Corporation’s effectiveness, independence, and autonomy.

The Bill, sponsored by the Chairman, Senate Committee on Banking, Insurance and other Financial institutions was sponsored by Senator Adetokunboh  Abiru, APC, Lagos East  Chairman Senate Committee on Banking,  Insurance and other Financial Institutions had passed second reading at the Senate.

The Stakeholders spoke yesterday in Abuja during a Public hearing on the NDIC Act  No. 63, 2023( Amendment) Bill, 2024( SB.277; Dishonored Cheques ( Offences ) Act, 1977( Repeal and Re- Enactment) Bill, 2024( SB.10); Electronic Transactions Bill, 2024( SB.94) and Nigerian Insurance Industry Reform Bill, 2024( 393)

In the proposed amendment, one of the most contentious is the removal of the “Concurrence” role for the Central bank of Nigeria (CBN) and substituting it with a rather “collaborative” role in an attempt to make the NDIC more independent in taking decisions bordering on its policy objectives.

During the public hearing, while the Central Bank of Nigeria, CBN noted  its opposition against this amendment,  the bankers directors and other stakeholders however endorsed it.

The Bill proposed amendments to sections 2, 3 and 4 of the principal Act substituting the word “collaboration” for the word “concurrence”

In his contribution, Acting Director, Financial Policy and Regulation Department of CBN, John Onoja, he said that  Collaboration means  that NDIC takes the decision and collaborates with CBN.

Conversely, Mustafa Chike-Obi, Chairman of the Bank Directors Association of Nigeria who hailed  the removal of the CBN concurrence requirement in Section 32, noted that this change aligns with the NDIC’s mandate to independently regulate insured deposit liabilities. 

In its memorandum to the Committee, the Financial Services Regulation Coordinating Committee (FSRCC) also protested against the amendment to section 16, increasing the capital base of the NDIC from 50 billion to 500 billion which shall be subscribed and held only by the federal government.

The memorandum read “Increasing authorized share capital from 50 billion to 500 billion and fully owned by the federal government render the additional capital redundant as it would not be yielding the required return on investment. The extant share capital structure should be between the Ministry of Finance and CBN as sustained in the principal Act.”

Also, Nestok Ikeagu, Director of Legal at the Securities and Exchange Commission (SEC), objected to the amendment removing the SEC Director-General from the NDIC board. 

According to him,  SEC’s role in investor protection justifies its position on the board, and removing it would hinder interagency collaboration. 

Meanwhile the NDIC boss voiced his support for the Bill, which he said will strengthen the NDIC.

Also speaking in favour of the Bill, Ronke Sokefun, the former chairman of the NDIC board decried that the NDIC lost it’s independence as liquidator to the CBN.

She said, “Thank you for taking a look at the traditional role of the corporation, which is to act as the liquidator in the event of a bank’s winding up. From the traditional role which the corporation has always executed, all of a sudden, it has to be at the whims and caprice of the CBN,  the CBN can decide to have another liquidator.

In his remarks, Abiru said that  the Senate will look into all the objections raised by the Stakeholders.