A Bill for an Act seeking to amend the Nigeria Deposit Insurance Corporation Act No. 63, 2023, to make the Corporation more effective, ensure its independence and autonomy, and bring it in line with current realities scaled second reading on Thursday at the Senate.
The Bill is sponsored by Adetokunbo Abiru, Chairman, the Senate Committee on Banking. Insurance and other Financial Institutions and 41 other members of the committee.
Leading the debate on the Bill, Abiru noted that the 2023 Act made substantial improvements to the 2006 Act, its implementation has been fraught with continuous debates and there have been a series of appeals from and consensus among stakeholders on the need for an amendment of the Act to address all the issues that have been raised concerning it.
The lawmaker said the Bill proposes to empower the President with the power to make appointments. He said the Principal Act curiously restricts 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 seeks to amend this provision to bring into in line with and consonance with Mr President’s power of appointment as enshrined in the Constitution of the Federal Republic of Nigeria 1999 (as amended)”, he said.
Abiru said the proposed bill will lay to rest once and for all the claims that the document/Bill that was assented to by the former President is materially different from what was passed by the 9th National Assembly.
He further said the Bill will guarantee the independence of NDIC to perform its functions. Section 1 (3) of the Act provides that ‘’The Corporation shall be independent in the performance of its functions” Nearly all of its important and exclusive duties, functions and powers are to be exercised subject to the concurrence of the Central Bank of Nigeria (CBN).
Abiru argued that the above provisions make the Act self-contradictory and the proposed bill is therefore amending the principal Act to guarantee NDIC’s independence in performing its statutory functions.
He further noted that the Bill seeks to reintroduce geographical representation. Abiru stated that the 2023 Act terminated geo-political representation on the Board of the Corporation.
According to him, the importance of the duties and functions of the Corporation viz a viz the need for inclusivity taking into cognizance the diversity of the nation requires that geo-political representation in the board is restored.
“In addition to harnessing the diversity of the nation and engendering inclusivity, the geo-political spread also helps with the dissemination of information of the activities of the Corporation” he explained.
Abiru also said the provisions of the principal Act which makes the Permanent Secretary, Ministry of Finance the Chairman of the Board is also being reviewed.
“This is because the workload and busy schedule of that office is such that makes such appointments untenable. This may not engender effective oversight of the affairs of the Corporation as is required for an organization that plays such an important role in the financial services sector.
‘In the same vein, the reasoning for the Director-General of the Securities and Exchange Commission being a member of the Board and the Interim Management Committee is also being addressed. This is as SEC is the regulator of the capital market and has nothing to do with deposit insurance”, the lawmaker said.
Speaking further, Abiru said the Bill will introduce the need for the Minister of Finance to constitute an Interim Management Committee for the Corporation within 30 days after the expiration or termination of the tenure of the Board is also introduced in the bill to forestall a recurrence of the recent situation where the Corporation faced challenges in its operations as a result of the absence of a board.
“The Bill if passed into law will correct the anomalies that have been highlighted above, strengthen the Corporation to make it more effective and safeguard its independence and autonomy to bring it in line with current realities and best practices. I, therefore appeal for your support for the passage of this Bill” Abiru said.
Several lawmakers argued and voted in favour of the bill and it passed second reading.
