REMARKS BY THE _CHAIRMAN, SENATE COMMITTEE ON BANKING, INSURANCE AND OTHER FINANCIAL INSTITUTIONS, DISTINGUISHED SENATOR (DR.) RAFIU ADEBAYO IBRAHIM_ AT THE *LEGISLATIVE RETREAT ON THE NIGERIA DEPOSIT INSURANCE CORPORATION ACT, 2006 (REPEAL AND RE-ENACTMENT) BILL, 2018* HELD AT INTERCONTINENTAL HOTEL, VICTORIA ISLAND, LAGOS ON WEDNESDAY 1ST MARCH – SATURDAY 3RD MARCH, 2018
I fell highly honoured and privileged to welcome the distinguished Members of this Committee, the Management and Staff of the NDIC and invited guests to this retreat on the Nigeria Deposit Insurance Corporation Act, 2006 (Repeal and Re-enactment) Bill, 2018. This Bill has been read the first time on Tuesday 15th February, 2018. (SB. 626)
Distinguished Colleagues, Management Staff of the NDIC, you may recall that the legal framework for the implementation of Deposit Insurance Scheme (DIS) was the NDIC Act, No 22 of 1988 which was repealed and replaced with the NDIC Act No. 16 of 2006. The existing Act addressed some of the challenges faced by the Corporation in the discharge of its mandate.
Distinguished Colleagues, in the light of contemporary developments in the international financial system, including the introduction of core principles for effective DIS and the Nigerian financial services industry in particular, it has become very necessary to further review the existing framework. The review is aimed at strengthening the Corporation’s supervisory capacities and addressing other challenges in the area of liquidity of failed financial institutions as well as ensuring compliance with the principles of an effective deposit insurance administration.
Distinguished Colleagues and Management Staff, we understand that the repeal and re-enactment of this Act is informed by the following specific objectives and provisions of this Bill based on harmonization of divergent and conflicting clauses and positions held by the CBN and the NDIC on the Bill.
i) Errors in the Extant Act;
ii) Public Policy Objectives;
iii) Mandate of the Corporation;
iv) Functions of the Corporation;
v) Composition and Powers of the Board;
vi) Composition of Interim Management Board;
vii) General Reserve Fund;
viii) Payment of Dividend by Insured Institutions while in default of assessment;
ix) Payment of Insured Deposits;
x) Notice of Termination of Insured Status;
xi) Condition for Termination of Insured Deposit;
xii) Procedure for Termination of Insured Status.
Distinguished Colleagues, Management Staff of NDIC, other proposed reviews and amendments in the Bill are aimed at clarifying the current provisions of the Act and also removing all bottlenecks towards its effective implementation.
Distinguished Colleagues, the overall objectives of this review is to further enhance the ability of NDIC to effectively carry out its statutory responsibilities so as to ensure that the insured deposits are not jeopardized thereby putting depositors’ money at risk.
Distinguished Colleagues, Management Staff of NDIC, for deposit insurance system to be effective, best practice dictates that it should be backed by a comprehensive and adequate legal framework which should be based on the mandate of the deposit insurance system, unambiguously specify the powers and authority of the deposit insurer, its sources of funding as well as participating institutions including the conditions for their participation.
Distinguished Colleagues, generally, the importance of this repeal and re-enactment bill cannot be overstretched given the role of NDIC in promoting safe and sound banking practice and also engendering depositors’ confidence in the system. As a result, there is need to redress certain lacuna that exist in the extant NDIC Act to enable the Corporation effectively discharge it mandate.
As the Bill progresses into the second reading, the Committee shall work assiduously to ensure that this Bill is given an expeditious consideration and passage into law by the Senate.
Thank you for your kind attention.
SENATOR RAFIU ADEBAYO IBRAHIM
Chairman, Senate Committee on Banking, Insurance and Other Financial Institutions.