Amending NDIC act will enhance depositors’ confidence – Ibrahim
The Managing Director of the Nigeria Deposit Insurance Corporations (NDIC), Umaru Ibrahim says there is an urgent need for the Corporation’s Act to be amended better functioning.
Ibrahim said amending the act will further promote depositors confidence in different Deposit Money Banks (DMBs), as well as Microfinance Banks (MFBs).
The managing director stated this while delivering a keynote address at a lecture and book launch tagged “30 years of DIS in Nigeria” to mark the Corporation’s 30 years anniversary in Abuja.
“The NDIC was saddled with the onerous responsibility of managing distress in the banking system. It adopted multiple distress resolution options including provision of financial assistance to deserving institutions, imposition of holding actions, change of management of affected banks, and assisted mergers.
“The NDIC Act was amended in 2006 to strengthen the Corporation’s powers so as to execute its mandate more effectively. However some challenges experienced since 2006 have necessitated the need to review the NDIC Act by the National Assembly,” he said.
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He added that the Corporation also implemented the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act 1994, which established Failed Banks Tribunals to prosecute those who were responsible for the failure of the banks.
According to him, the different policies and regulatory strategies embarked upon by the agency led to the emergence of critical reforms in the sector.
“The Corporation introduced significant reforms during the period, such as Enterprise Risk Management, Differential Premium Assessment Systems (DPAS), built capacity of staff in Risk Based Supervision (RBS) and deployed a new performance management system. The Corporation also extended DIS coverage to Microfinance Banks (MFBs) and Primary Mortgage Banks (PMBs). It also reviewed the maximum coverage for different categories of deposit taking financial institutions.
“To assist in the promotion of the financial inclusion initiative of the CBN, the NDIC introduced the Framework for a Pass-through Deposit Insurance scheme to enhance confidence, safety and stability in the mobile payment system. The scheme caters for the Mobile Money depositors.
“In the year 2011, the Corporation established three (3) Bridge Banks to take-over the assets and assume the liabilities of the three (3) failed banks, namely Afribank, Bank PHB and Spring Bank. Polaris Bank was also established in 2018 as a Bridge Bank following the liquidation of Skye Bank, he further stated.
