Stakeholders express different opinions on proposed NDIC amendment Act

By Iyojo Ameh

Stakeholders in the banking and insurance sectors have expressed different opinions on the bill seeking for amendment of Nigeria Deposit Insurance Corporation (NDIC) Act , 2023 .

The bill sponsored by the Chairman, Senate Committee on Banking , Insurance and other Financial Institutions , Senator Adetokunbo Abiru , aims to enhance the Corporation’s effectiveness, independence, and autonomy.

It proposes ammendments to sections 2, 3 and 4 of the principal Act substituting the word “collaboration” for the word “concurrence” .

But at the public hearing held by Senator Abiru led committee , stakeholders expressed divergent views in support and against some provisions of the proposed legislation .

The most contentious provision in the bill supported and opposed by some of the stakeholders , is 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.

While the Managing Director of NDIC, Bello Hassan , former Chairman of NDIC Board, Mrs Ronke Sokefun and Banks Directors Association of Nigeria , supported the provision, the Central Bank of Nigeria kicked against it .

The NDIC boss in his submission , said the provision will strengthen NDIC .

Similarly Mrs Sokefun in supporting the provision, said it will restore the traditional role of NDIC taken away by CBN.

” We thank the Senate 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, was all of a sudden, made to be at the whims and caprice of the CBN by deciding another liquidator.

Also expressing his views in support of the provision, Chairman of Directors Association of Nigeria , Mustafa Chike-Obi, Chairman of the Bank Directors Association of Nigeria, said proposed removal of CBN
concurrence requirement in Section 32 was a welcome development .

According to him, ” the proposed amendment aligns with the NDIC’s mandate to independently regulate insured deposit liabilities”

But the Central Bank of Nigeria represented by its acting director , financial policy and regulation , Mr John Onoja, said the meaning of Collaboration means that NDIC takes the decision and not collaborating with CBN.

The Financial Services Regulation Coordinating Committee (FSRCC), in its memoranda to the Senate Committee , also protested against ammendment to section 16, increasing the capital base of the NDIC from N50 billion to N500 billion which shall be subscribed and held only by the federal government.

“Increasing authorized share capital from N50 billion to N500 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”, he read.

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

He emphasized that the SEC’s role in investor protection justifies its position on the board, and removing it would hinder interagency collaboration.

In his closing remarks , the Chairman of the committee, Senator Abiru said the committee would look into all the views expressed and come up with generally acceptable legislation .