The Central Bank of Nigeria, CBN has been stripped of its power to appoint the CEO of the Nigerian Deposit Insurance Corporation, NDIC.
Nigerian Senate on Tuesday stripped the CBN its power through an amendment of the Bank Deposit Regulator’s Principal Act.
This followed a report submitted to the upper legislative Chamber by the Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Senator Mukhail Adetokunbo Abiru which was debated on Tuesday.
The Central Bank of Nigeria had the power to appoint the Chairman and Board members of the NDIC in the principal Act. The provision had been a subject of argument, but the amendment which passed a third reading after rigorous debate at a plenary presided by the Senate President, Godswill Obot Akpabio, now consolidated the power of the President to appoint the Chairman and members of the board of the NDIC while the Central Bank of Nigeria, CBN which hitherto recommend to the appointees, would now concentrate on supervising the corporation.
The passage of the bill was also meant to strengthen the capacity of the Nigeria Deposit Insurance Corporation to safeguard depositors, ensure the stability of financial institutions, and promote trust in the banking system.
The legislation, titled, “Nigeria Deposit Insurance Corporation Act No 33 of 2023,” was sponsored by Senator Mukhail Adetokunbo Abiru (Lagos East) and all the members of the Senate Committee on Banking, Insurance and other Financial Institutions.
In the principal Act, Abiru explained that the NDIC will enjoy its autonomy and independence in line with the current realities across the world.
 He said: “The NDIC based on the new amendment of its Act, would focus on the examination of the banks and despite the fact that the NDIC 2023”, the Act made substantial improvements to the 2006 Act, its implementation had been fraught with continuous debates.
 He specifically said stakeholders had consistently been engaging in a series of appeals on the need for an amendment of the Act to address all the issues that have been raised concerning it.
 He said, “The Nigerian Deposit Insurance Corporation (Amendment) Bill, 2024, is thus a critical piece of legislation aimed at strengthening the Nigerian financial system.
 He said, “Considering the above, therefore, the general consensus among stakeholders was that it is important that the legal framework is reviewed.
“This is to make the Corporation more effective in discharging its functions, safeguard its independence and autonomy and bring it in line with current realities and best practices.
“This is particularly because the Corporation plays a vital role in safeguarding the interests of depositors and promoting confidence in the financial sector.
“The evolving challenges in the global and domestic banking environments necessitate the amendment of the current law to keep pace with these developments and ensure the NDIC remains fit for purpose.”
 After consideration of the report, the bill was passed into law by the Senate President.