The Senate Committee on Banking, Insurance, and Other Financial Institutions has called on the newly appointed leadership of the Nigeria Deposit Insurance Corporation (NDIC) to prioritise early risk detection in order to protect depositors’ funds and maintain stability in the banking sector.
Speaking at the opening of the 2025 NDIC Retreat in Niger State, Committee Chairman, Senator Mukhail Abiru, emphasised the importance of proactive risk management. He warned against waiting for financial institutions to collapse before taking action, particularly in an era of rising cyber threats and digital vulnerabilities.
“We live in rapidly changing times. Beyond the usual risks banks face, cyber-attacks have become a major concern. NDIC must adapt by strengthening its risk management systems and maintaining high vigilance,” Abiru said.
He assured the NDIC of the Senate’s continued legislative backing to help it fulfil its mandate effectively.
Newly appointed NDIC Managing Director/Chief Executive, Dr. Oludare Sunday, reaffirmed the corporation’s commitment to enhancing its risk management framework to address emerging challenges, especially in cybersecurity.
“We are not reinventing the wheel. If existing systems are working, we will fine-tune and improve them,” Sunday said. “Cybersecurity and other digital risks are now central to our vision for NDIC.”
He pledged regular engagement with the legislature to ensure transparency and policy alignment, while expressing gratitude for the National Assembly’s support.
Calls for Legislative Reforms and Stronger Oversight
Also speaking at the event, Professor Uche Uwaleke, Director of the Institute of Capital Market Studies at Nasarawa State University, Keffi, urged the Senate to consider amending the NDIC Act 2023. He said the reforms would modernise Nigeria’s deposit protection system and align it with international best practices set by the International Association of Deposit Insurers (IADI).
According to Uwaleke, the current law does not adequately empower NDIC to oversee risks associated with fintech firms or provide quick resolution mechanisms for digital-only financial institutions. He noted that while fintechs often keep float accounts in commercial banks covered by NDIC, there’s no clear policy if the fintech itself collapses.
“Other countries, like Singapore, explicitly extend deposit insurance to e-wallets. Nigeria must update its legal framework to address these gaps,” Uwaleke said.
He proposed several legislative amendments, including:
- Replacing “concurrence” with “collaboration” in provisions involving the Central Bank of Nigeria (CBN), to better reflect IADI Principle No. 4.
- Amending Section 89(1) of the NDIC Act to grant the corporation mandatory access (“shall”) to CBN examination reports.
- Adding provisions for NDIC to access real-time digital payments data from CBN and NIBSS.
- Allowing tiered or risk-based deposit insurance coverage, rather than a universal flat limit.
“Risk-based coverage is already in practice in countries like Canada, the US, South Korea, and the UK. It better protects vulnerable depositors and encourages sound banking practices,” he added.
Senators Back Stronger Preventive Measures
Senator Babangida Hussaini (Jigawa North-West), a committee member, reinforced the need for proactive regulation in the banking sector. He urged NDIC to focus more on preventing financial distress rather than responding after failures occur.
“Prevention is better than cure. Your primary goal should be to ensure that depositors never lose money in the first place,” he said.
He also called for a review of legacy cases, particularly those involving insider abuses, and referenced a past Economic and Financial Crimes Commission (EFCC) report highlighting such issues.
“We noticed supervisory lapses during our oversight visit to the Kano office. Strengthening internal controls and early warning systems is crucial,” Hussaini added.
The retreat concluded with renewed commitment from the NDIC leadership to collaborate with lawmakers, fine-tune existing systems, and respond effectively to the evolving financial landscape.
