On Thursday, the Senate passed a bill for second reading, seeking to amend the Nigeria Deposit Insurance Corporation Act. Sponsored by Senator Adetokunbo Abiru, the Chairman of the Senate Committee on Banking, Insurance, and Other Financial Institutions representing Lagos East under the APC, the bill aims to enhance the effectiveness of the corporation, ensure its independence and autonomy, and align it with present-day realities.

During the debate on the bill, Senator Abiru emphasized the necessity of amending the Act in response to appeals and consensus among stakeholders regarding various issues concerning it. He highlighted that the proposed amendments would grant the President direct critical appointment powers, diverging from the current Act's limitation of the President's authority for appointment of the Managing Director and Executive Directors based on recommendations from the Governor of the Central Bank of Nigeria.

The bill, co-sponsored by all 42 members of the Senate Committee on Banking, Insurance, and other financial institutions, was first introduced in the Senate on November 22, 2023. It seeks to amend the Nigeria Deposit Insurance Corporation Act No. 63 of 2023 to enhance the corporation's effectiveness, safeguard its independence and autonomy, and align it with current realities and best practices.

Among the key amendments proposed by Senator Abiru is to align the appointment powers of the President with those enshrined in the Constitution of the Federal Republic of Nigeria 1999 (as amended). He argued that this amendment would ensure the independence of the NDIC in performing its functions, reducing the requirement for concurrence from the Central Bank of Nigeria in exercising its duties, functions, and powers.

Additionally, the bill aims to reintroduce geographical representation on the board, emphasizing the importance of inclusivity and diversity in decision-making processes. Senator Abiru highlighted the need for geographical spread to facilitate information dissemination and enhance the effectiveness of the corporation.

Moreover, the bill reviews provisions that designate the Permanent Secretary of the Ministry of Finance as the Chairman of the Board, considering the workload of government functionaries. It also addresses the inclusion of the Director-General of the Securities and Exchange Commission (SEC) on the Board and the Interim Management Committee, clarifying that SEC's regulatory role in the capital market is unrelated to deposit insurance.

The bill proposes that the Minister of Finance constitutes an Interim Management Committee for the Corporation within 30 days after the expiration or termination of the Board's tenure to prevent operational challenges faced by the Corporation due to the absence of a board.

Overall, Senator Abiru stressed that passing the bill into law would rectify identified anomalies, strengthen the corporation, safeguard its independence and autonomy, and align it with current realities and best practices. After thorough deliberation by senators, the Senate passed the bill for a second reading.

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