Senate To Speedily Amend NDIC Act For Improved Deposit Cover
The quest for the amendment of the Nigeria Deposit Insurance Corporation (NDIC) Act 2006, to enable it eliminate assessed gaps hindering the full implementation of the Deposit Insurance System (DIS) in Nigeria, would be given accelerated attention.
The Senate Committee on Banking, Insurance and Other Financial Institutions expressed has expressed a strong commitment of the lawmakers to the amendment soon, which would also facilitate the realisation of public policy objectives of DIS in the country.
The Chairman of the Committee, Dr. Rafiu Adebayo Ibrahim, gave the assurance during an oversight visit to the corporation, last week, alongside the committee members.
The Managing Director and Chief Executive Officer of NDIC, Alhaji Umaru Ibrahim, briefed the lawmakers on the recent activities of the corporation, particularly its response to the revocation of the licences of 153 Micro-Finance Banks (MFBs) and six Primary Mortgage Banks (PMBs), by the Central Bank of Nigeria (CBN).
He said the corporation had already commenced the payment of depositors of 25 MFBs and the deposits verification of 50 others.
The NDIC chief listed the challenges encountered by the microfinance banks to include non-performing loans, insider credit and abuse, non-compliance with extant regulations on their establishment and the overbearing indulgence in other fringe operations, along with poor earnings.
He reiterated the strong resolve and commitment of the corporation to assist in the investigation and prosecution of all those who contributed to the collapse of Skye Bank Plc.
Meanwhile, the long suffering depositors of Savanah Bank, Fortis MFB, Aso Savings and Union Homes may have to endure more, as he said unless the enabling Act of NDIC was speedily amended, the corporation will remain handicapped in acting in behalf of the depositors.
Citing the case of Savanah Bank, he said that NDIC Act, as presently enacted, inhibits the corporation from reimbursing depositors since the licences were yet to be revoked due to protracted litigation.
Responding, the committee chairman commended the corporation for the quality of its reports on the supervision of banks, which have become the benchmark in the industry.
He expressed concerns that the recent policy of the CBN, which raised the minimum capital requirements for microfinance banks from N20 million to N200 million, and N100 million to NI billion, and N2 billion to N5 billion for unit, state, and national operations respectively, would affect the objectives of the financial inclusion strategy.