Business & EconomyNDIC seeks quick amendment of act

NDIC seeks quick amendment of act

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The Nigeria Deposit Insurance Corporation (NDIC) has appealed to the National Assembly to expedite action in the proposed amendment of the NDIC Act to enable assert its mandate especially in the area of liquidation of ailing money deposit institutions.
The NDIC said loopholes in the Act establishing the agency as related to liquidation has seriously eroded its powers to deal with liquidation process as bank owners often take advantage of the deficiencies to challenge the exercise.
Umaru Ibrahim Managing Director and Chief Executive Officer of the NDIC while addressing participants at the International Association of Deposit Insurers (IADI) in Lagos noted that more achievements would have been recorded by the corporation if certain challenges were not encountered.
Ibrahim further said that beside poor legislation NDIC is facing inadequate funding as the size of its deposit insurance system (DIS) relative to the quantum of insured deposits in the system is not comparable as the adequacy of its DFI is still not properly ascertained using the Target Fund Ratio approach in line with the best practice.
To resolve this he said the corporation is at present pursuing aid from the World Bank to enable it develop a framework for the computation of Target Fund Ratio and using it in determining the adequacy of its DIF.
The director-general also complained about inadequacy of public awareness of DIS in Nigeria pointing that despite the awareness campaign by NDIC public perception of the corporation as well as benefits and limitations of DIS is not encouraging.
He therefore urged participants to come up with a comprehensive review of the implementation challenges faced by different types of DIS in different jurisdictions.
Earlier, John Chikura Chief Executive Officer of Deposit Protection Corporation of Zimbabwe and chairman of IADI African Region lamented non adoption of DIS by many African countries despite its advantage in strengthening the financial system.
Chikura reported with enthusiasm the Global adoption of Explicit Deposit Insurance Systems which increased has to 110 from 12 countries in the mid-seventies which is a reflection of global recognition of DIS in promoting and enhancing financial stability and maintaining soundness and resilience of the banking systems.
Unfortunately he pointed out that African countries have failed to respond to adopt the initiative as only nine schemes exists in the Continent of 54 nations leaving 45 countries without the scheme.
He challenged the workshop with the theme ‘DEPOSIT INSURANCE SYSTEMS & DESIGNS’ to interrogate the trend, debate issues around it and come forward with resolution to encourage African countries to embrace the initiative.

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