Senate committed to speedy amendment of NDIC Act’
The Nigerian Senate said it is commitment to accelerate the amendment of the Nigeria Deposit Insurance Corporation, NDIC, Act, 2006.
The Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Sen. Rafiu Adebayo, made this known recently when he led his team on an oversight visit to the Corporation.
He said the Act, when amended will help bridge the gaps that have hindered the full realization of the public policy objectives of the implementation of the Deposit Insurance System, DIS, in Nigeria.
Sen. Adebayo while commending the NDIC for the excellent quality of its reports on the supervision of banks which have become the benchmark in the industry, was however concerned over the recent recapitalization of the Microfinance Banks by the Central Bank.
The apex bank had recently raised the minimum capital requirements for Microfinance Banks in Nigeria from N20million to N200million, N100 million to N1billion, and N2billion to N5billion for unit, state, and national MFBs respectively.
The chairman fears that the policy could be inimical to the objectives of the financial inclusion strategy of the central bank.
On his part, the managing director of the Corporation, Umaru Ibrahim, updated the Committee on NDIC’s response to the revocation of the licenses of 153 Micro-Finance Banks and six Primary Mortgage Banks by the Central Bank of Nigeria.
He said the Corporation had already commenced the payment of depositors of 25 MFBs and the deposits verification of 50 others.
He listed the challenges encountered by FMBs in particular 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.
The NDIC boss further informed the Committee of the strong resolve and commitment of the Corporation to assist in the investigation and prosecution of all those who contributed to the collapse of the defunct Skye Bank.
On the issue of the long suffering depositors of Savanah Bank, Fortis MFB, Aso Savings and Union Homes, the NDIC boss said unless the enabling Act of the Corporation was speedily amended, the Corporation was handicapped in acting to end the plight of depositors of the institutions.
Using the case of Savanah bank as an example, the MD added that the NDIC Act, as presently enacted, inhibits the Corporation to reimburse depositors since their bank licenses were yet to be revoked due to protracted litigation. He thereafter made appealed to the Committee to amend the NDIC Act.