The Nigerian Senate has approved the Nigeria Deposit Insurance Corporation (NDIC) Act (Amendment) Bill, 2024, aiming to enhance NDIC’s effectiveness in safeguarding depositors and supporting financial stability. Sponsored by Senator Adetokunbo Abiru, Chairman of the Senate Committee on Banking, Insurance, and Other Financial Institutions, the bill was passed during its third reading in a plenary session.
The bill’s key updates include restoring the President’s authority to appoint the NDIC’s managing directors and executive directors, with appointments subject to Senate confirmation. It also establishes an Interim Management Committee to ensure NDIC operations continue smoothly between board appointments, addressing past operational disruptions caused by board vacancies.
Further amendments increase the maximum compensation for insured depositors to N5 million for traditional banks and N2 million for microfinance institutions, reflecting current economic conditions and providing additional security for depositors. The NDIC will also have greater authority to protect depositor assets in the event of bank failures, although oversight over public offerings will remain separated from bank deposits.
Originally, the bill sought to replace the Central Bank of Nigeria’s (CBN) “concurrence” role with a more collaborative approach to enhance NDIC’s independence. However, this provision was removed following concerns about potential conflicts with CBN’s regulatory authority under the Banks and Other Financial Institutions Act (BOFIA).
The bill now awaits President Bola Tinubu’s assent to become law.
