Deconstructing the Anomaly in NDIC Act

The Nigeria Deposit Insurance Corporation (NDIC) Act 2023, is an “intentional fraud”. President Bola Tinubu and the National Assembly must undo this affront, writes Precious Ugwuzor

It was obvious that some forces had a field day during the reign of the immediate past President Muhammadu Buhari. 

Proofs of some of the unthinkable actions perpetrated by those who were later known as the ‘cabal’ abound. 

Unfortunately, the Central Bank of Nigeria (CBN) leadership played a pivotal role as became evident in the build-up to the 2023 general election, when the CBN introduced currency redesign. 

But revelations after a new leadership took over at the CBN showed that the then leadership of the apex bank abused privileges, including doctoring the new Nigeria Deposit Insurance Corporation (NDIC) Act 2023, obviously for some ulterior motives.  

One of the first and loudest voices to draw the attention of Nigerians to the fraud and forgeries in the NDIC Act, 2023 and to directly attribute it to the CBN leadership, was the former Lagos State Commissioner for Home Affairs, Abdulhakeem Abdullateef. 

Although he was then newly appointed board chairman of the agency, he vehemently protested to President Bola Tinubu in his viral video on X. He implored the Nigerian leader to probe the hurriedly passed law by erstwhile administration.   

Obviously, the NDIC Deposit Insurance Fund was the target of the then CBN leadership. It wanted to appropriate the funds, hence the urge to tamper with the provisions of the Act. There was no gainsaying that the new Act falls short of the standards stipulated by the International Association of Deposit Insurers (IADI) for NDIC independence and establishment of corporate governance principles. 

Another worrying aspect of the manipulated Act is that the president’s powers to appoint the members of the board of the corporation were eroded. 

The CBN now has the right to nominate four of the seven directors, and just one of the seven directors is independent. This, however, is contrary to the previous situation, when seven out of 12 were independent.

The NDIC is an independent agency of the Nigerian government created to protect depositors, promote monetary stability, and encourage competition and innovation in the banking sector through supervision of banks.

It helps to insure the interest of depositors in case of imminent or actual financial difficulties of banks, guarantee the settlement of insured funds when a deposit-taking financial institution can no longer repay their deposits, protect the banking system from instability caused by runs and loss of depositors’ confidence. 

The NDIC advises the CBN in the liquidation of distressed banks and manages assets of distressed banks until they are fully liquidated.

Stakeholders are however unanimous in their agitation that the 35 sections infused into the law by “corruption engineers in Nigeria”, and assented by Buhari, will impede NDIC’s ability to dispassionately carry out its responsibility. 

The process leading to the amendment of the NDIC Act, 2006 started after the peer review assessment of the International Association Deposit Insurers (IADI) in 2011, when they visited Nigeria to assess the deposit insurance system in the country and evaluate the level of compliance with international best practice.

Then, it was recommended that there was a need for more operational independence for the corporation as a safety-net agency. 

Rather than work to achieve the 2011 IADI recommendations, the NDIC Act version sent to the National Assembly purportedly drafted by the Godwin Emefiele-led CBN in collaboration with the Managing Director/CEO of NDIC, Bello Hassan, who was until December 2020, the CBN Director Banking Supervision. 

They drafted-in a senior legal staff from the CBN and was converted to a substantive staff (director) in NDIC legal department, thereby disrupting the structure that existed in the department at the detriment of workers who had diligently served the agency. 

With the ‘fraudulent’ law now assented to, the apex bank arrogated the powers to license, supervise and grant forbearances to banks, withdraw their license, sanction them and order their liquidation to itself. Hence, it was widely suspected that the entire process was completed while the NDIC board was not in place to perfect the anti-people law. 

The 2019 board’s tenure ended on December 8, 2022, but surprisingly, the first closed-door ‘public hearing’ was held on December 7, 2022. From that point, the process was shrouded in secrecy. The oversight committees of the National Assembly and the MD secretly perfected the document to suits their motives. 

Addressing Nigerians and President Tinubu in 2023, Abdullateef said, “NDIC stinks. There is a lot of rot going on. They say, ‘when you fight corruption, corruption fights you’. Now the document you see (referring to the NDIC Act, 2023) is one of the ways the corruption engineers in Nigeria are fighting back. 

“Each time you say you want to have a true change like the one brought about by President Bola Ahmed Tinubu, you will have the change champions, who will support him, but you will also have the change skeptics and the game changers, who will frustrate all his efforts to rid Nigeria of this mess. 

“Now, this is the purported new act of the NDIC, and I tell you for nothing, this is Emefiele’s Act. I tell you because here, they have taken away the powers of the president in respect of the NDIC. 

“The cabal has taken over the NDIC. This Act was taken to former President Buhari 48 hours to his leaving office. They knew at that time that the man was so busy and would not be able to read everything they have put here, therefore, they got him to sign it.” 

Pointing to “another fraud was committed” in the passage of the Act, Abdullateef, not that the document that was signed was materially different from the vote and proceedings of the National Assembly that passed it. 

He was miffed that the those behind these actions designed it to ensure that the body was not able to perform its function as effectively as it should.  

According to him, “No sooner that we were appointed by the president, waiting for confirmation, than they quickly introduced a new bill – a law that will truncate everything that we wanted to do. I participated in the National Assembly because as a lawmaker. 

“I’m a lawyer of over 30 years’ experience at the bar, so I know that whatever is passed by the National Assembly and assented to by the president will be what my board will implement. So, I was interested in every detail of what they were passing. My God! What has happened now is completely different from what was passed.  

“While the National Assembly passed an act that would have the representatives of the six geopolitical zones in Nigeria to superintend over the affairs of the NDIC so that it is able to discharge its duties, it also gave the president, the free hand to appoint competent Nigerians who are capable of becoming Managing Directors and Executive Directors. 

“Those that doctored the document decided to tie the hands of president by saying that only someone recommended by Emefiele alone can be the Managing Director or the Executive Director. This is in contrast with the previous Act where the president has the freedom to appoint any competent Nigerian to superintend over the affairs of NDIC. 

“They have removed the representatives of the six geopolitical zones. They have now fraudulently made the Permanent Secretary, who does not have time, to be the chairman of the board. How can a Permanent Secretary be a judge in his own course? That is the ministry supervising the affairs of NDIC! How can the head of that ministry still be the head of NDIC?

“Do you know why? I visited the Permanent Secretary, and he told me, ‘I told them several times, do not make the mistake of making me the chairman of the board! I have a thousand and one things to do as a Permanent Secretary Ministry of Finance!’ They know I will not have time so that they can do all the mess they want to do,” Abdullateef stated.  

Abdullateef also lamented that the doctored law killed the career progression of the 1600 workers in NDIC, asking, “how can you say that somebody who is working as a teacher should not have the hope that one day, I will become the principal? 

“So, what they have done here is that no worker – no director in NDIC, can ever progress to become executive director, or become the managing director, because they said even if you work all your years in NDIC, only the CBN can appoint and recommend, who should be the executive director or managing director. 

“The one that is affecting the depositors is that NDIC will no longer be able to make depositors smile. I have thousands of petitions on my table by Nigerians, who are owed by the NDIC, who find it difficult to claim their rights from the NDIC. 

“They are frustrated because the NDIC Act has so many useless sections, some that say, ‘if you don’t come and claim your money within a time, the NDIC will become the owner of the money.’ How can you say that a microfinance that has closed should get the depositors to come and get their money? 

“You say you are using town criers. Town criers in today’s modern Nigeria, when they have phone numbers? So, you’re denying Nigerians trillions of money.  This law has removed the independence of the NDIC. The former law said that NDIC shall be free to go and investigate the banks. 

“Now this law says, NDIC can only go and investigate banks if CBN approves. Before, once NDIC realises you are supposed to collect your money, NDIC should be able to pay you free! 

“Now, there is a section which says when the bank suspends payment to you and NDIC is supposed to pay you, NDIC should go and get the approval of CBN before they can pay you. This is corruption! You do not need the approval of the CBN if you say NDIC is an independent agency! 

“I want the president not to act on this law until it is probed. Probe the passage of this law, probe the inclusion of Section 7, which takes away the right of Ministry of Finance, which takes away the representative of the Ministry of Finance and replace it with two directors from CBN, probe why what is passed is fundamentally different from what is assented to, probe what happened between the time the National Assembly passed it and there was no divergence.  

“Under the law, do you know the status of this Act? It is null and void! Any time Mr. President assents to a bill that is materially different from what was passed by the Senate and the House of Representatives, it means there was a material omission, and that law was not matured for assent.”  

He, therefore, suggested that the law be returned to the National Assembly so members can debate on it. 

This, of course, is why President Tinubu cannot feign ignorance of the fraud inherent in the NDIC Act 2023. Thus, as Nigeria and his administration wage war against corruption, that obnoxious law should be brought down. 

This is not only because  will it erode the independence and effectiveness of the corporation, the provisions is also non-compliant with international best practice and negates the core principles of the International IADI to which NDIC is a signatory and a key member.  

The executive and the legislature should work together to produce an act that would guarantee NDIC independence, to ensure the safety, soundness and stability of the banking sector in the country.  


The executive and the legislature should work together to produce an act that would guarantee NDIC independence, to ensure the safety, soundness and stability of the banking sector in the country

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