BOFIA: NDIC boss calls for harmonisation of roles with CBN

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The Managing Director/Chief Executive of Nigeria Deposit Insurance Corporation(NDIC), Umaru Ibrahim, has urged the National Assembly to harmonise the roles of both NDIC and Central Bank of Nigeria(CBN) in the NDIC Act 2006 and the Banks and Other Financial Institutions Act (BOFIA) 2004.

Ibrahom, who stated this at the Public Hearing on the Amendment of the BOFIA Act 2004 towards the Repeal and Re-enactment of the Bill to BOFIA 2020  organised by Senate Committee on Banking, Insurance and Other Financial Institutions at the National Assembly in Abuja said this would help  establish effective legal instruments to secure the safety and stability of the nation’s financial system.

According to him, the variances in the Bills that may be perceived as overlapping mandates between the two institutions should be clarified in order to avoid any ambiguity in the laws governing their operations and should be reflected in the BOFIA 2020.  He said this  was “specifically critical in the area of the resolution of failing banks where the NDIC should be recognised as the primary actor in the resolution process while the CBN intervenes in the event of systemic crisis.

He also expressed the need for the Corporation to be involved in the process of licensing banks in collaboration with the CBN in order to ensure the necessary fit and proper checks and to establish clearer assessment of the status of financial institutions before licensing.

He noted that “the bill seems to suggest the option of the appointment of other entities in the liquidation of failed banks,” adding that “the Bill should be amended to reflect the NDIC as the sole liquidator of failed banks based on the Corporation’s core mandate of Bank Liquidation.” He said, the clear delineation of roles between the NDIC and CBN would strengthen the legal framework and contribute towards effective and efficient collaboration in the supervision and regulation of the Banking Sector.

A statement by Dr Sunday Oluyemi, NDIC Director of  Communication and Public Affairs  Department, shows the highlights of the NDIC presentation at the NASS focused largely on express prohibition of insider loans/criminalising insider loans by making it an offence punishable with imprisonment and fine for directors of licensed banks to: obtain credit facilities from their own banks, whether or not such facilities are secured.

Source: THE SUN

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