The Nigerian Deposit Insurance Corporation (NDIC) has expressed concern that legal actions initiated by former employees of failed banks are hindering its ability to effectively carry out its mandate of liquidating insolvent financial institutions.
This concern was raised by the acting Managing Director/Chief Executive of NDIC, Emily Osuji, during a sensitisation seminar held on Thursday in Lagos for judges of the National Industrial Court and members of the Investment and Securities Tribunal. The event was jointly organized by the NDIC and the National Judicial Institute (NJI) to foster stronger collaboration between the judiciary and financial regulators.
Osuji emphasized that disputes involving severance packages, unpaid salaries, and other benefits for ex-employees of defunct banks require careful legal handling. She urged judges to adhere strictly to the payment hierarchy outlined in the NDIC Act of 2023 when deciding such matters.
“Employment-related cases—such as claims for severance pay, outstanding salaries, and exit benefits—must be considered in line with the priority of claims defined in the NDIC Act, 2023,” Osuji said. “This is essential to preserve the legal framework governing the liquidation process.”
She further explained that judgments awarded to former bank staff, particularly when enforced against the assets of the NDIC itself, create significant operational challenges and impede the Corporation’s liquidation mandate.
Despite these obstacles, Osuji noted the NDIC had achieved notable progress, including the recent orderly closure of Heritage Bank. However, she stressed that persistent lawsuits and court decisions stemming from employment claims continued to strain the institution’s capacity to fulfill its responsibilities.
To tackle these challenges, the NDIC has ramped up public awareness campaigns and intensified engagement with the judiciary, Osuji said, highlighting the importance of judicial cooperation in strengthening the role of the NDIC as a deposit insurer.
“These efforts support our alignment with the Core Principles for Effective Deposit Insurance Systems, as defined by the International Association of Deposit Insurers,” she added.
In his welcome remarks, Salisu Abdullahi, Administrator of the NJI, underscored the importance of judicial understanding of complex financial legislation. He urged judicial officers to stay informed on the evolving nature of banking and finance, especially in the face of digital banking, cryptocurrencies, and decentralized finance.
“It is critical for judges to grasp both the technical and broader economic implications of financial laws,” Abdullahi stated. “This seminar not only facilitates dialogue between regulators and the judiciary but also promotes global best practices, legal precedent, and policy insights that can strengthen Nigeria’s financial system.”
He concluded by stressing the need for a judiciary that is adaptable and forward-looking to keep pace with rapid changes in the financial landscape.
