Finance Minister vows to address issues rising from BOFIA 2020

Joshua Elekwachi, Abuja.

The Honourable Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, has assured the newly inaugurated Managing Director and Chief Executive Officer (MD/CEO), the Executive Director (Operations) that she would work with them and the Board of Nigeria Deposit Insurance Corporation (NDIC) to resolve issues from the recently amended Banks and Other Financial Act (BOFIA) 2020.

“I am aware there are issues that arose from the recently amended Banks and Other Financial Act (BOFIA) 2020 to which my attention was drawn. We will work with you and the board to resolve them. I pledge the Ministry’s continuous support and collaboration to your corporation in the discharge of its mandate,” she said.

At the event held in Abuja, Mr. Bello Hassan, the MD/CEO is to take over from Alhaji Umaru Ibrahim who was at the helms of affairs at the corporation from 2010 to 2020, spanning two terms of five years each, while the Executive Director (Operations) would be succeeding Prince Aghatise Erediauwa who also served a two-term tenure, from 2010-2020.

As the Minister with supervisory responsibility over the corporation, Mrs. Ahmed noted that both functionaries contributed immensely in nurturing the corporation to the enviable height it has attained in the Nigerian financial system and indeed amongst members of the International Association of Deposit Insurers (1ADI) across the world.

Speaking on behalf of the Ministry of Finance, the Honourable Minister said: “The Ministry is deeply grateful for their contribution in maintaining financial system stability in the country. Let me also at this point commend the Executive Director, Corporate Services, Mrs. Omolola Abiola-Edewor, the chairman, and members of the Board of Directors for effectively overseeing the affairs of the corporation during the transition period that lasted about three months. I have no doubt the new managing director is taking over an organisation that is functionally, professionally, and financially sound based on recent reports on the performance of the corporation submitted to the Ministry.

She noted that the successes achieved by the corporation over the years have been because of good corporate governance, and the dedication of the entire staff, adding: “I would expect that the executive management team under your leadership will continue to discharge the responsibility of the corporation with diligence and build on the successes already achieved to take the corporation to greater heights.”

Ahmed commended President Buhari, “for the excellent choice of both the managing director and the executive director (Operations) for these positions. As already known by many, Mr. Bello Hassan, the new managing director, until his appointment, was the director, banking supervision department of the Central Bank of Nigeria (CBN) and represented the bank on the Boards of many financial institutions, including the NDIC.

“Also, Mr. Mohammed Mustapha Ibrahim is a former director in the corporation and has a lot of institutional memory. Both have come with relevant cognate experience and knowledge of the workings of this organisation. This should enable the appointees to hit the ground running.

She noted that over the years, the corporation has become an important component of the nation’s financial safety net and at the forefront of activities that promote financial system stability through its contributions to financial inclusion and other economic policies of the government. “Furthermore, the corporation has been consistent in remitting its 80 percent operating surplus to the Consolidated Revenue Fund of the government, among many other milestones achieved (one of the very few state-owned enterprises (SOEs) that do so diligently). I urge to keep this good track record.”

“From available records, it has become traditional to appoint the managing director from the CBN. Since the inception of the corporation, three chief executives of the NDIC have been former staff of the CBN, including the immediate past managing director. Today, history is repeating itself as we witness the inauguration of yet another long-standing staff of the CBN.

She Further stated that the appointment of the two people was not surprising, given the close working relationship between the two organisations, adding that she looked forward to a continued harmonious and complementary working relationship between the two key financial regulatory agencies. She also noted that the successes achieved by the corporation over the years have been because of good corporate governance, and the dedication of the entire staff, expecting that the executive management team would continue to discharge the responsibility of the corporation with diligence and build on the successes already achieved to take the corporation to greater heights.

In his response, Mr. Hassan thanked Mr. President and the National Assembly for the appointment and the confirmation, and the Honourable Minister for finding time to do the inauguration, despite her tight schedule. He assured that they would work to improve on the current successes of the corporation.

“We will strengthen the deposit insurance framework with a faster and orderly resolution for liquidated financial institutions whose licenses have been revoked by the CBN. Of recent, there have been calls by the industry for NDIC to offer assistance in line with the provisions of the Act to insured Financial institutions that need the assistance; we want to make sure that we offer the assistance in a faster manner, so as to promote confidence and stability within the financial system.

“We want to take the Honourable Minister’s word as an enabler of NDIC to support us, because we have challenges. In terms of the registration that have been liquidated, I think about 49 of them, the rate of recovery was not very significant. Only 10 have been paid full dividend. There is the need to enhance the power of NDIC to help them do more to recover debts owed by liquidated financial institutions. And there has been slow growth in Deposit Insurance Fund, and I believe if the Act is reviewed, we would be able to fastrack the growth of the Deposit Insurance Funds(DIF) without recourse to borrowing from CBN or the treasury to fund the liquidation process”.