Some of the stakeholders who supported the proposed amendment include, Ganiyu Ogunleye, former NDIC Managing Director, depositors group and representatives of banks and insurance companies.
On his part, Umaru Ibrahim, NDIC managing director/CEO expressed optimism that the proposed amendment will greatly impact on the Corporation’s ability to perform its functions more effectively towards achieving its set goal of becoming one of the leading deposit insurers in the world.
Ibrahim stated that the proposed amendments will help in “protecting depositors and contribute to the stability of the financial system through effective supervision of insured institutions.”
He maintained that the proposed amendment when passed into law will ensure a safe and sound banking system in Nigeria, stressing that “a deposit insurance scheme remains a financial guarantee established to protect depositors in the event of a bank failure and also to offer a measure of safety for banking system.”
Ibrahim added that “deposit insurance scheme forms part of the financial safety net necessary to reduce risk of severe financial crises. Without an appropriate financial safety net, problems regarding solvency or liquidity of a financial institution have the potential of turning into full-blown financial crisis.
“With an appropriate financial safety net in place, depositor confidence is enhanced and the likelihood of financial crises is reduced to the barest minimum.”
He maintained that NDIC was primarily set up as a ‘risk minimiser’ with broad mandates of deposit guarantee, supervision of insurer financial institutions, bank distress resolution and liquidation, adding that the Corporation remains the “only deposit insurer in West Africa” as well as the oldest and most robust deposit insurer in Africa.
Ibrahim who raised alarm over the threatening safety, stability and soundness of the banking system which led to the failure of some banks in 2009, argued that “the instability caused by the meltdown gave rise to the need for review of the legal framework for depositor insurance in most jurisdictions inuding Nigeria.”
He however noted that any attempt to whittle down the powers of the Corporation as a risk minimizer, would be counter-productive to the stability and safety of our banking sector.
While opposing the proposed amendment, Tokunbo Martins, CBN’s Director on Banking Supervision described the proposed statutory amendment to liquidate insurance institutions, as having “double captains to a one ship”, since it is the responsibility of CBN to discharge the responsibility.
In the same vein, Muhammad Ahmad, former Director General of National Pension Commission (PenCom) stressed the need to avoid unnecesaary conflict between regulatory agencies.
Ahmad however applauded the complementary role of NDIC in the regulation of financial sector.
Speaking earlier, Chukwudi Onyereri, chairman House Committee on Banking and Currency reiterated the commitment of the House to synergize with relevant authorities and general public in strengthening the financial sector and more particularly in carrying out the transformation agenda of the Federal Government.
He said “Considering the nature and dynamic changes in the financial sector coupled with technological developments, it’s imperative that the enabling laws of regulatory institutions be reviewed from time to time either by amending the existing legislation or enacting new laws that take care of present and future circumstances.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
