From Kenneth Udeh, Abuja
Attorney-General of the Federation and Minister of Justice, Prince Lateef Fagbemi (SAN) and major stakeholders in the Banking, Insurance and other Financial Institutions in the country have thrown their weight behind the amendments of the Electronic Transactions, Dishonoured cheques and the Nigeria Deposit Insurance Corporation (NDIC) Act.
The stakeholders also lauded the efforts of the Chairman of the Senate Committee, Senator Abiru Mukhail Adetokunbo for spearheading the amendment process of the bills especially the Nigerian Insurance Industry Reform Bill, 2024.”
Endorsements and recommendations were also made to the bills on Thursday and Friday during a two-day public hearing organised by the Senate Committee on Banking, Insurance and other Financial Institutions.
In attendance were the representatives of the NDIC, Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC), Chartered Institute of Bankers of Nigeria (CIBN), Bank Directors if Association of Nigeria (BDAN), Capital Market Academics of Nigeria (CMAN) among others.
In his support for the bill, the Attorney General, represented by one of his aides, Mr Oloyede Hussein, said the proposed reform would help to curb capital flight that has been the order of the day in the Insurance sector in Nigeria.
“The office of Attorney-General of the Federation, has studied the proposed provisions contained in the bill with strong conviction that it would reform the sector from one plagued by capital flight, to economy contributory sector,” he said.
In the course of their presentations, all stakeholders agreed to the amendment of the NDIC Act No 63 of 2023 which they said would make the corporation more effective, ensure its independence and autonomy in line with Section 1(3) of the Principal Act to bring it in line with current realities and best practices.
In the same vein, the Managing Director of NDIC, Bello Hassan, in his presentation at the Public Hearing said the proposed legislation is commendable and that the corporation is 100% behind the proposed reforms.
However, in her presentation, the President of Chartered Institute of Insurance of Nigeria, Mrs Yetunde Ilori, acknowledged the support of the Insurance reform bill.
On the other hand, she said the provisions that would make all motors in Nigeria to be insured by their owners, should be included as being practised in other countries in the world.
According to her, such a provision would deepen insurance penetration in Nigeria, make the sector more viable and make risk management more effective for the insured.
The President of Nigerian Council of Registered Insurance Brokers, Babatunde Adeleke, in his presentation, said the council supported the reform bill but wanted inclusion of provision that would compel all officially-approved houses in Nigeria to be insured.
“This is very necessary and requires empowerment of building approving authorities and National Insurance Commission (NAICOM), with relevant laws.
“For NAICOM, require legislation by way of provision in the reform bill, should be provided for it, to seal off buildings or houses that are not insured,” he said.
CBN represented by Mr John Onoja, however, objected to the amendment of the NDIC Act submitting that the extant Act Provisions should be retained.
Onoja explained that the bill introduced several contradictions and inconsistencies which erode “the regulatory powers of the CBN and grant the NDIC vast powers in the regulation and supervision of banks and other financial institutions contrary to the limited role reserved for deposit insurers in best practice regimes.
Among other objections the CBN disagreed with Section 9 of the bill which proposes to amend Section 16 of the Principal Act by increasing the authorised capital of the Corporation from Fifty billion Naira) (50,000,000,000) to Five Hundred billion Naira (500,000,000,000.)
They also disagreed with the section which seeks to remove the CBN and the Federal Ministry of Finance as the sharer of the Corporation by providing that all the capital of the Corporation should be subscribed and held only by the Federal Government.
CMAN President, Prof Uche Uwaleke, canvassed for a change in Section 7 (2d) which deals with the governing body of the NDIC which makes provision for “a representative of the Federal Ministry of Finance not below the rank of a Director.”
He said: “Whereas this provision was specific in the case of the representative from the CBN ‘who shall be the Director of Banking Supervision,’ it has not specified the relevant department with respect to the Federal Ministry of Finance.”
Uwaleke recommended that Section 7 (2dii) be slightly amended to read “a representative of the Federal Ministry of Finance who shall be the Director, Home Finance.”
The NDIC on their part expressed total support for the bill. They, however, stated that the Act was wrongly captured as No 63 instead of No. 33 and amendment of Section 52 was wrongly captured as Section 35.
BDAN urged the Senate to make clarifications to the delineation of powers between NDIC and CBN, particularly regarding the appointment of NDIC as liquidator of NDIC to avoid potential conflicts with existing provisions in the BOFIA.
SEC DG, Dr. Emomotimi Agama, protested the removal of the DG of the Commission from the substantive and interim boards of the NDIC.
With regard to the amendment of the Electronic Transactions Bill, CIBN President Deji Olanrewaju, urged that the Federal Competition and Consumer Protection Commission, (FCCPC) be involved in the process as it touches on the protection of the rights of consumers and to avoid any clashes or gaps with existing legislation.
He also said: “The NITDA, in consultation with CBN, FCCPC and NCC, CIBN and FintechNGR may prescribe rules, conditions and regulations that shall be complied with to meet the provisions of this bill.”
CIBN made inputs to 33 sections of the bill; they include; Sections 2(3) , 4(3) , 8(2c) , 9, 10(1b), 11(1c), 11(3), 12(1), 14, 15 (b), 17(c) , 18 (1e), 18 (7), 19 (1f), 20 (2) and (3) , 23 (1) , 24, 25 26(3) , 27 (4) (d), 28(3) , (4b) , 29 (2) (4), 30 (1), 33 (2), 33 (4e) , 34 (2) and 34 (6), 39 ( c ) , 40 (1) (g) and 40 (3) , 42 (2) ( d ) , 42 (4) and 42 (5).
With regard to dishonoured cheques, the NDIC suggested the provision for the obligation of the drawee to report a dishonoured cheque to the appropriate regulatory authority within the shortest possible time, possibly upon the failure of the drawer to comply with the provision of Section 7(1) of the bill. The failure of the drawee to perform this obligation may also attract sanctions on the drawee.
They also noted that Section 7(1) of the bill did not state whether “within 7 days” includes Saturdays, except the intention of the bill is to state that wherever “days” are mentioned, it means clear days. This makes the interpretation of the provision ambiguous.
The CIBN on its part, commended the increment of the fine for the body corporate from the sum of N5,000 in the current Act to N1,000,000 and 50,000,000,000.
They also advocated for the addition of a clause addressing unintentional dishonour due to bank errors or communication breakdowns to protect individuals from unintended consequences and focuses on intentional misuse.
On service of Notice of Dishonour Section 7 (1), BDAN posited that that a drawee to serve a notice of dishonour to the drawer of a dishonoured cheque and provide a copy to the payee within specific time frames for serving notices be extended to 14 working days for both the drawer and the person who presents the dishonored cheque in order to ensure compliance and reduce operational strain.