Senate Revokes CBN’s Authority to Appoint NDIC CEO

On Tuesday, the Nigerian Senate voted to remove the Central Bank of Nigeria’s (CBN) authority to appoint the Chief Executive Officer of the Nigerian Deposit Insurance Corporation (NDIC) through an amendment to the Principal Act governing the Bank Deposit Regulator.

This decision came after a report was presented to the Senate by Senator Mukhail Adetokunbo Abiru, Chairman of the Senate Committee on Banking, Insurance, and Other Financial Institutions. The Senate debated the report extensively during a plenary session led by Senate President Godswill Obot Akpabio.

Previously, the CBN held the power to appoint both the Chairman and board members of the NDIC, a provision that had sparked considerable debate. The newly amended legislation now grants the President the authority to appoint the NDIC’s Chairman and board members, while the CBN will shift its focus to overseeing the corporation rather than making appointments.

The legislation aims to bolster the NDIC’s ability to protect depositors, enhance the stability of financial institutions, and foster confidence in Nigeria’s banking system. The bill, titled “Nigeria Deposit Insurance Corporation Act No 33 of 2023,” was sponsored by Senator Abiru and supported by all members of the Senate Committee on Banking, Insurance, and Other Financial Institutions.

Senator Abiru emphasized that the NDIC would maintain its autonomy and independence, reflecting contemporary global standards. He stated, “With the new amendment, the NDIC will prioritize the examination of banks. Although the 2023 Act significantly improves upon the 2006 version, its implementation has faced ongoing challenges and debates.”

He noted that stakeholders had repeatedly called for amendments to address existing concerns, leading to the introduction of the Nigerian Deposit Insurance Corporation (Amendment) Bill, 2024. He stressed the importance of reviewing the legal framework to enhance the corporation’s effectiveness, safeguard its independence, and align it with modern practices.

“The NDIC plays a crucial role in protecting depositors’ interests and fostering confidence in the financial sector,” Abiru remarked, highlighting the necessity for amendments to adapt to the evolving challenges in both global and domestic banking environments.

Following a thorough review of the report, the Senate President approved the passage of the bill into law.