NDIC Seeks To Hold Directors Accountable For Bank Failures

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The Nigeria Deposit Insurance Corporation has sought a legal backing from the National Assembly to enable it to hold directors accountable for bank failures, among others.

The NDIC also sought clarification regarding the variances in the bills that might be perceived as overlapping mandates between the NDIC and the Central Bank of Nigeria in order to avoid any ambiguity in the laws governing their operations.

The Managing Director, Chief Executive, NDIC, Umaru Ibrahim, said this on Thursday in a statement, entitled ‘Clarity in NDIC and CBN roles in proposed amendment of BOFIA critical to effective regulation of banks’.

Ibrahim made a presentation at the public hearing for the amendment of the Banks and Other Financial Institutions Act 2004, according to the statement.

He said the public hearing was organised by the Senate Committee on Banking, Insurance and Other Financial Institutions at the National Assembly 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,” he said.

The NDIC presentation also focused on the express prohibition of insider loans and criminalising insider loans by making it an offence punishable with imprisonment and fine for directors of licensed banks to obtain credit facilities, secured or not, from their own banks.

The corporation said there was no need for the approval of the CBN to be sought in the implementation of supervision, control and management and resolution of distressed banks as reflected in the bill as this constituted the core mandates of the corporation.

“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 added.

– Punch.

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