Senate Committee on Banking, Insurance and Other Financial Institutions, on Monday, tasked the newly appointed leadership of Nigeria Deposit Insurance Corporation (NDIC) to prioritise early detection of risks to safeguard depositors’ funds in the banking system.
Speaking at the opening of the 2025 NDIC Retreat in Niger State, Chairman of the committee, Senator Mukhail Abiru, stressed the need to adopt a proactive approach to financial crisis prevention rather than focusing on interventions after institutions might have collapsed.
The new NDIC Managing Director/Chief Executive, Dr. Oludare Sunday, said the corporation remained committed to reviewing its risk management system amid emerging challenges, like cybersecurity.
Director, Institute of Capital Market Studies, Nasarawa State University, Keffi, Professor Uche Uwaleke, urged the senate committee to consider forward-looking reforms in Nigeria’s deposit insurance system through amendments to the NDIC Act 2023.
Uwaleke said the proposed amendments will modernise deposit protection frameworks and further align with the core principles of the International Association of Deposit Insurers (IADI).
He said by aligning with international best practices, Nigeria could build a more resilient, flexible, and responsive deposit insurance system.
Abiru said amid the growing prevalence of cyber threats and digital vulnerabilities in the financial system, NDIC must strengthen its risk management systems and maintain a high level of vigilance.
He stated, “We live in rapidly changing times. Beyond the usual challenges banks face, we are also dealing with cyber-attacks and other risks.
“I am sure you are already thinking of how to incorporate risk management to address these issues in the banking sector, which you are now beginning to oversee.”
The lawmaker assured NDIC of continuous legislative support to enable the agency perform its mandate effectively.
A member of the committee, Senator Babangida Hussaini (Jigawa North-West), said proactive regulation in the banking sector was inevitable.
Hussaini stated, “Let me also echo what was said earlier: prevention is better than cure. The main goal of the corporation is to protect bank customers and investors.
“It is important that you focus on preventing distress in the banking sector, not just on how to respond after failures.
“Make sure that people do not lose their money in banks, in the first place.”
Hussaini also called for intensified supervision and an institutional review of legacy cases, including insider abuses. He referenced an earlier report by the Economic and Financial Crimes Commission (EFCC), which contained details of insider abuses, and advised the new management to revisit the files and ensure that necessary actions were taken.
He said, “We observed some lapses in supervision during our oversight visit to the Kano office. Strengthening your internal control and early warning systems will help prevent distress before it happens.”
In his remarks, the NDIC managing director vowed to maintain regular engagement with the legislature to ensure transparency and alignment on key issues.
He thanked the committee for the confidence reposed in the new team and pledged to consolidate on past achievements. Sunday said, “We have heard the charge by the chairman of the committee. Like we discussed earlier, there is no intention to reinvent the wheel.
“If things are working, we will simply fine-tune them and make them better. That is the promise we are making.
“We have been charged to review our risk management system, especially in light of developments like cybersecurity threats.
“We will treat that with all the seriousness it deserves. It is part of the vision we have for NDIC.”
Sunday added, “We thank the National Assembly for the legislative support we have enjoyed so far and the ongoing cooperation. We ask that this support be sustained.
“We, in turn, assure you that we will do our best to meet with the committee regularly and fulfil our responsibilities.”
In his keynote address on “Strengthening Legislative and Policy Frameworks to Enhance Deposit Insurance in Nigeria,” Uwaleke said in the light of current digital realities, the current NDIC Act did not adequately empower the corporation to monitor, assess, or resolve risks emerging from fintech firms.
He said the Act lacked provisions for fast-track resolution of digital-only financial institutions, stating that many fintechs rely on float accounts in commercial banks.
As a result, he said, “if the bank fails, NDIC covers the fintech’s funds, but what if the fintech itself collapses? Singapore (SDIC) explicitly covers e-wallets (e.g., GrabPay, Revolut).”
Among other proposed legislative interventions, Uwaleke called for amendment of all relevant sections requiring cooperation of the Central Bank of Nigeria (CBN) by substituting the word “collaboration” for “concurrence”.
He pointed out that the proposed amendment will put the country in conformity with the IADI Principle No. 4, which required Deposit Insurer to work in collaboration with other financial safety-net participants.
He further called for the amendment of “Section 89 (1), which provides that ‘the corporation may be granted access to reports of examination conducted by the Central Bank of Nigeria, by substituting ‘shall’ for ‘may’.”
“And insert a subsection requiring cooperation with the CBN and NIBSS to access real-time payments data and digital account flows.”
Uwaleke urged the senate committee to include a provision that allows NDIC to adopt tiered or risk-based coverage limits, instead of a one-size-fits-all deposit insurance scheme.
According to him, “Differentiated coverage in deposit insurance is practised in several jurisdictions around the world, including Canada, US, Korea, UK
“These systems tailor coverage based on types of depositors, account purpose, or financial institution risk profile, rather than applying a flat, universal coverage limit.
“Differentiated coverage protects vulnerable depositors more effectively and aligns with global standards of risk-based deposit insurance.”
James Emejo
Follow us on:
