NDIC Seeks Banking Act Amendment

The Nigeria Deposit Insurance Corporation (NDIC) has urged the National Assembly to amend the  Banks and Other Financial  Institution (BOFI) Act to inform,  with best International Practices.
This was disclosed by the Board Secretary/Director (Legal/Services) of the  NDIC, Mr. Belema Taribo,  in Abuja on Monday  while speaking  with newsmen.
Taribo said a bill for an act to amend the Bank’s and other financial  institutions  act,  among other things, is to establish a Deposit Fund at the apex nation’s Central Bank of Nigeria (CBN) for proper  standardization and management of  Dormant Accounts in conformity with international best  practices  and eliminate the  possibility of banks  converting dormant  account balances into income and to strengthen risk  management and internal control processes of banks.
The NDIC board scribe advised that accounts operated by government  ministries,  departments and agencies should not be exempted  from the  amendment by the  legislature, adding that it is necessary to include such in the legislative bill to avoid unscrupulous practice  by heads of some of the MDAs who secretly lodge government funds in commercial  banks without  authorisation.
He said that some of such  accounts  have become  dormant  for various reasons like the sudden sack of the head of the agency or demise of  the Chief Executive  Officer.
Taribo also alleged that insider loans  within the  banking industry have constituted a higher percentage of non-performing loans  in Nigeria’s banking sector which  have negatively  affected the  growth of the sector.
He called for the enactment  of legislation to  prohibit insider loans  by bank  owners or directors  taking  loan from their own bank  without due  processes or pay back,  adding that any loan to be  obtained  by bank owners should be  used  for housing or as  car loans and should first be approved  by the nation’s regulatory banking body, the CBN.