The Central Bank of Nigeria, Nigerian Deposit Indemnification Corporation and other stakeholders on Monday failed to accede on who should have full control over the supervision of banks in the country and assure the safety of depositors’ mazuma.
The House of Representatives is repealing and re-enacting the NDIC Act, 2006 to provide for the aegis of depositors’ funds in banks.
However, at a public aurally perceiving on the bill to repeal and re-enact the Act organised by the House Committee on Banking/Currency, the CBN argued that the NDIC could not postulate full supervision of the banks without reaching an accedence with it.
The CBN’s Director of Banking Supervision, Mrs. Tokunbo Martins, who gave the bank’s position, verbally expressed, “The NDIC must have an accedence with the CBN afore it can supervise the banks.”
Martins verbalized that the CBN had yet to come to terms with the authentic reasons the NDIC was backing the repeal of its Act, integrating that the central bank would later submit a comprehensive replication to the committee.
“There can never be two captains in the same ship as the NDIC cannot be on self-employment as a liquidator of banks, deposit insurer and bank supervisor without an accedence with the CBN,” she verbalized.
But the NDIC and other stakeholders opposed the CBN, verbalizing that the corporation could supervise as well liquidate banks if the present Act was repealed and re-enacted.
For example, a former Managing Director, NDIC, Mr. Ganiyu Ogunleye, held the view that rather than pursue a narrow route, the central bank should take a broader appreciation of the proposed law.
“This is incongruous as we are all agencies of regime working towards a mundane goal,” he verbalized.
The Managing Director, NDIC, Mr. Umaru Ibrahim, told the committee that the proposed amendment of the Act would make the corporation to post more preponderant results in the future.
He verbalized, “Mr. Chairman, please sanction me to state for the purposes of accentuation that the NDIC was established by Decree No. 22 of 1988, now the NDIC Act, 2006 to operate the Deposit Indemnification Scheme in Nigeria.
“A deposit indemnification scheme is a financial guarantee established to bulwark depositors in the event of a bank failure and additionally to offer a quantification of safety for the banking system. The deposit indemnification scheme forms part of the financial safety net obligatory to reduce the jeopardy of rigorous financial crises.
“Without a congruous financial safety net, quandaries regarding solvency or liquidity of a financial institution have the potential of turning into a full blown financial crisis. With a congruous financial safety net in place, depositors’ confidence is enhanced and the likelihood of financial crises is reduced to the barest minimum.”
The Fiscal Responsibility Commission and civil society organisations were among other agencies and groups that fortified the bill.
On his component, the Speaker of the House, Mr. Aminu Tambuwal, was optimistic that “the amendment will shore up investors’ confidence and enhance the personal fortunes of Nigerians.”
