Stakeholders Express Divergent Views on Proposed NDIC Amendment Act

Sunday Aborisade in Abuja

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

 The bill was sponsored  by the Chairman, Senate Committee on Banking,  Insurance and other Financial Institutions , Senator Adetokunbo Abiru.

It aims to enhance the corporation’s effectiveness, independence, and autonomy and  proposes amendments 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 Abiru-led committee , stakeholders expressed divergent views in  support and against some provisions of the proposed legislation .

The most contentious provision in  the bill which was either supported or opposed by some of the stakeholders , was 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.

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 CBN kicked against it .

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

She said: “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 Banks Directors Association of Nigeria ,   Mustafa Chike-Obi, said the 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  CBN  represented by its Acting Director , Financial Policy and Regulation, Mr John Onoja, said the meaning of vollaboration was 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 amendment 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.

It also proposed that the 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.

It also proposed that the extant share capital structure should be between the Ministry of Finance and CBN as sustained in the principal Act.

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

The bill also seeks to restore the President’s power to appoint the Managing Director and Executive Directors, geo-political representation on the board of the corporation.

It proposed the constitution of an interim management committee within 30 days, after  the expiration or termination of the tenure of board.

Meanwhile many stakeholders at the public hearing supported the Dishonoured Cheques Act (Repeal and Re-enactment Bill) and the Electronic Transactions Bill.

The Electronic Transactions Bill on the other hand sought to provide a legal and regulatory framework for conducting transactions using electronic or related media.

The Dishonoured Cheques, Offences, Repeal And Re-enactment Bill, 2023, sought to align the 1977 Act in tandem with current realities.

The public hearing was declared open by the Senate President, Senator Godswill Akpabio, represented by the Senate Chief Whip, Senator Tahir Monguno.

It had in attendance,  the management team of NDIC, CBN, Securities and Exchange Commission, (SEC), and other stakeholders in the financial services sector. Most of the stakeholders who made presentations, commended the Committee, and declared support for the bills. They urged the panel to consider divergent views while considering the bills.