The Senate on Tuesday at plenary passed  a bill to strengthen the capacity of  the Nigeria Deposit Insurance Corporation’s(NDIC) to safeguard depositors fund  and strengthen financial institutions in Nigeria.

This followed adoption of report of Senate Committee on Banking, Insurance and other Financial Institutions on  the bill titled, “Nigeria Deposit Insurance Corporation Act 2023″

The bill was sponsored by Sen.

Abiru while  presenting  the report said the bill would make the NDIC, more effective, safeguard its independence, autonomy and bring it in line with current realities and best practices.

He said the bill consolidates the power of the President to appoint the Chairman and members of the board of the NDIC while the Central Bank of Nigeria (CBN) which hitherto recommends the appointees, would now concentrate on supervising the corporation.

According to him, the NDIC based on the new act will focus on the examination of the banks.

He said: “the Nigerian Deposit Insurance Corporation (Amendment) Bill, 2024, is thus a critical piece of legislation aimed at strengthening the Nigerian financial system.

“The proposed amendments will enhance the NDIC’s capacity to safeguard depositors, ensure the stability of financial institutions, and promote trust in the banking system.

“Given the rapidly evolving nature of the financial sector, this Bill represents a timely response to the challenges and opportunities that lie ahead.”

He said, “to further empower the corporation by guaranteeing its independence in performing its statutory functions in line with Section 1 (3) of the principal Act.

“The principal (2023) 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 2024 bill now seeks to amend the provision to bring it in line with and in consonance with Mr President’s power of appointment as enshrined in the Constitution of the Federal Republic of Nigeria 1999 as amended.

“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 appointment untenable.

“The importance of 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.

“This is to forestall the recent situation where the Corporation faces challenges in its operations as a result of the absence of a board.”

Abiru said there was consensus among stakeholders on the importance of the NDIC as it was set up for the purpose of protecting depositors fund, guarantee settlement of insured funds .

This, he said would help maintain financial system stability.

“Considering the above therefore, the general consensus among stakeholders was that it is important that the legal framework is reviewed.

“This is to make the corporation more effective to discharge its functions, safeguard its independence and autonomy and to bring it in line with current realities and best practices.

“This is particularly because the Corporation plays a vital role in safeguarding the interests of depositors and promoting confidence in the financial sector.

“The evolving challenges in the global and domestic banking environments necessitate the amendment of the current law to keep pace with these developments and ensure the NDIC remains fit for purpose.”(NAN)