By amending the Bank Deposit Regulator’s Principal Act on Tuesday, the Nigerian Senate deprived the Central Bank of Nigeria (CBN) of its authority to name the CEO of the Nigerian Deposit Insurance Corporation (NDIC).

This came after Senator Mukhail Adetokunbo Abiru, the chairman of the Senate Committee on Banking, Insurance, and Other Financial Institutions, presented a report to the upper legislative chamber that was discussed on Tuesday.

According to the main Act, the Central Bank of Nigeria was able to choose the NDIC’s chairman and board members. After much discussion at a plenary led by Senate President Godswill Obot Akpabio, the amendment passed a third reading. This strengthened the President’s authority to select the NDIC’s chairman and board members, while the Central Bank of Nigeria (CBN), which had previously recommended the appointees, would now focus on overseeing the company.

The Nigeria Deposit Insurance Corporation’s ability to protect depositors, maintain the stability of financial institutions, and foster confidence in the banking sector was also intended to be strengthened by the bill’s passing.

Senator Mukhail Adetokunbo Abiru of Lagos East and every member of the Senate Committee on Banking, Insurance, and other Financial Institutions sponsored the proposal, which was named the “Nigeria Deposit Insurance Corporation Act No 33 of 2023.”

Abiru clarified in the main Act that the NDIC will benefit from its independence and autonomy in accordance with global conditions at the moment.

He said: “The NDIC based on the new amendment of its Act, would focus on the examination of the banks and despite the fact that the NDIC 2023”, the Act made substantial improvements to the 2006 Act, its implementation had been fraught with continuous debates.

He specifically said stakeholders had consistently been engaging in a series of appeals on the need for an amendment of the Act to address all the issues that have been raised concerning it.

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

He said, “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 in discharging its functions, safeguard its independence and autonomy and 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.”

After consideration of the report, the bill was passed into law by the Senate President.