The Nigeria Deposit Insurance Corporation (NDIC) has emphasized that lengthy judicial proceedings and the execution of judgments against its assets are significant hurdles that hamper its ability to effectively discharge its duties. The Acting Managing Director and Chief Executive, Mrs. Emily Osuji, made this assertion during a sensitization seminar for judges of the Federal High Court in Lagos. The seminar, themed “Strengthening Adjudication and Depositor Confidence in the Banking System,” was organized in collaboration with the National Judicial Institute.
Mrs. Osuji acknowledged the achievements of the NDIC and the Central Bank of Nigeria (CBN), especially their orderly and efficient closure of Heritage Bank. However, she pointed out that despite these successes, legal challenges remain. These include long judicial proceedings and the enforcement of judgments against the NDIC’s assets for liabilities of banks in liquidation.
She noted that recent proceedings related to the liquidation of Heritage Bank offered an opportunity to observe the application of the NDIC Act 2023, particularly Section 69, which restricts the court from issuing certain orders against the NDIC while it is fulfilling its core mandate, such as reimbursing insured depositors or acting as a liquidator.
Mrs. Osuji further stated that legal actions have been entertained against failed insured institutions and the NDIC itself, despite existing provisions that prohibit such proceedings. Enforcement measures like garnishee orders or attachments against the NDIC and the assets of failed insured institutions have also been permitted by courts.
The Chief Justice of Nigeria, Justice Kudirat Kekere-Ekun, emphasized the complexities of banking litigation, including insolvency proceedings and regulatory interventions, and called for a sound judicial approach that promotes trust in the financial system. “To achieve meaningful progress, it is crucial for judicial officers to adhere to the principles of efficiency, transparency, and consistency in the adjudication process. The interpretation and application of legal statutes must align with global best practices, recognizing that financial stability is a collective responsibility involving the judiciary, regulators, and policymakers.”
Retired judge of the Federal High Court, Justice Ibrahim Buba, called for improved corporate governance in the financial sector. “If you have crooks managing the system and wrecking banks, and if they are not tried, we will not get anywhere. You can’t entrust your money if it is not safe, which negatively impacts depositors.”
