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NDIC seeks legislation to hold directors accountable for bank failures

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Umaru Ibrahim NDIC boss

The Nigerian Deposit Insurance Corporation (NDIC) is pursuing a legislative empowerment that will enable it make directors account for bank failures.

The banking industry underwriter equally wants clarification of bills that might be construed as overlapping mandates between the NDIC and the Central Bank of Nigeria (CBN) towards avoiding ambiguity in the laws governing them.

Umaru Ibrahim, the NDIC chief, said this on Thursday in a statement titled Clarity in NDIC and CBN Roles in Proposed Amendment of BOFIA Critical to Effective Regulation of Banks.

The document noted that Ibrahim made the presentation at the public hearing for the amendment of the Banks and Other Financial Institutions Act 2004 arranged by the Senate Committee on Banking, Insurance and Other Financial Institutions in Abuja.

“Directors of banks should be held, are personally liable without any limitation for the causes of the failure of their banks where they have been found to be negligent in managing the bank,” said the NDIC Managing Director.

Read also: Buhari asks Senate to confirm nominees for Law Reform Commission, NDIC

The insurer also requested the outlawing and criminalisation of insider loans by making them punishable by jail term and fine for licensed banks’ directors whether the facilities are secured or not.

It affirmed that CBN’s endorsement was not necessary in executing the control, supervision and management of distressed banks as stated in the bill given that the document already contained the core mandates of the regulator.

“The corporation should, therefore, carry out these functions in consultation with the CBN, not with the consent of CBN, as both institutions are independent,” it said.

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