Friday, 22 October, 2021

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NDIC proposes stiff penalties for Directors of failed banks


The Nigeria Deposit Insurance Corporation (NDIC) on Thursday proposed stiff penalties for negligent Directors of failed banks.

According to a statement by the Director Communication and Public Affairs Department, Sunday Oluyemi: “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.

“The imposition of penalties and persecution of various offences to serve as a deterrent to officers and directors of banks and will ensure that the banking industry ensures compliance with available laws and regulation in order to avoid paying stiff penalties.”

The statement added: “In a bid to establish effective legal instruments to secure the safety and stability of the nation’s financial system, there is a need to closely examine enacting laws with a view to harmonising the positions of the Nigeria Deposit Insurance Corporation (NDIC) and the Central Bank of Nigeria (CBN) in the NDIC Act 2006 and The Banks and Other Financial Institutions Act (BOFIA) 2004.

“The NDIC MD/CE explained that variances in the Bills that may be perceived as overlapping mandates between the NDIC and the CBN should be clarified in order to avoid any ambiguity in the laws governing their operations and should be reflected in the BOFIA 2020.

“This, he said was specifically critical in the area of the resolution of failing banks where the NDIC should be recognised as the primary actor in the resolution process while the CBN intervenes in the event of systemic crisis.”

Credit: The Nation

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