NDIC seeks stronger legal framework to enhance its operations
The Nigeria Deposit Insurance Commission (NDIC) has urged the National Assembly to develop a stronger legal framework to empower the commission to discharge its mandate more effectively in ensuring safety and stability of the Nigerian banking sector.
Bello Hassan, managing director, NDIC, noted that the advent of technology has brought new challenges in the regulation and supervision of the banking sector despite the benefits in terms of increased access to new markets, financial innovation and increased consumer choices. These, according to him, border on corporate governance and risk management.
Hassan said this on Thursday at the 2021 NDIC Retreat for Members of the Senate Committee on Banking, Insurance and Other Financial Institutions in Nigeria state with the theme, “The Role of NDIC in Promoting an Effective Supervisory Framework in the Banking Sector”.
“It is our strong belief that through the learning-points that may prop-up from papers to be presented and ensuing deliberations that will follow at this retreat, we will not only come up with roadmap that would enhance the role of the deposit insurance system in achieving financial system stability, but also set out framework for empowering the Corporation to discharge its mandate more effectively through the instrumentality of the National Assembly,” Hassan said.
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Hassan stressed that the deposit insurance system is an important component of the financial safety net and economic growth. He also pointed out that banks can only effectively perform their role in the economy when they are healthy, safe and sound, and as such expected to be highly liquid, adequately capitalized, with high quality assets and robust risk management systems at all times.
“New technologies emanating from digitalisation are driving disruption and re-shaping the future across payments and banking ecosystems. Consequently, the task of ensuring the safety and stability of the nation’s banking sector has become more crucial for the regulatory/supervisory authorities especially, the NDIC ” the MD said.
The MD further expressed the readiness of the government to provide confidence in the financial system by putting in place a financial safety net to promote financial system stability and support economic growth and development. Deposit insurance system is an important component of the financial safety net in addition to prudential regulation/supervision and a lender of last resort function of the Central bank of Nigeria (CBN).
Uba Sani, Chairman, Senate Committee on Banking, Insurance and other Financial Institutions , said the retreat will x-ray the performance of the NDIC in the performance of its supervisory role, the availability of equipment to ensure optimal performance, as well as the legal or institutional obstacles in the discharge of its duties in order to we come up with measures to reposition and strengthen NDIC ‘s capacity .
“Let us x-ray NDIC, look at its strengths and weaknesses and make appropriate recommendations for strengthening its operations. A solid banking sector will boost our economic recovery efforts and help address developmental challenges. This roundtable is worthy of our time and total attention. Fresh ideas reenergises us, refusing to take an introspective look of ourselves is the surest way of stagnating or even going down,” the Chairman said.