The Acting Managing Director and Chief Executive of the Nigeria Deposit Insurance Corporation (NDIC), Emily Osuji, has expressed concern over the growing number of legal cases filed by former employees of failed banks, warning that the trend is impeding the Corporation’s ability to efficiently wind down distressed financial institutions.
Speaking at a sensitization seminar for judges of the National Industrial Court (NIC) and members of the Investment and Securities Tribunal, Osuji said the litigation surge is undermining NDIC’s core mandate of safeguarding the financial system and protecting depositors’ interests.
While highlighting the Corporation’s progress in the liquidation of failed banks, Osuji noted that legal hurdles particularly those stemming from employment related claims continue to pose significant obstacles.
“Cases involving severance benefits, salary arrears, and exit entitlements by former employees of liquidated banks need to be carefully examined,” she said. “Judges of the National Industrial Court should refer to the priority of claims as outlined in the NDIC Act, 2023 when handling these disputes.”
She cautioned that rulings favoring former bank staff, especially when such judgments are enforced against NDIC assets, severely constrain the Corporation’s liquidation responsibilities.
“These employment-related litigations represent a serious threat to our operations, especially when judgments obtained by former employees are executed against NDIC’s resources,” Osuji added.
In his remarks at the seminar, themed “Strengthening Adjudication and Depositor Confidence in the Banking System,” the Administrator of the National Judicial Institute (NJI), Hon. Justice Salisu Garba Abdullahi, emphasized the critical role of judicial decisions in maintaining public trust in the banking sector.
“Depositor confidence is the foundation of a stable banking system,” Abdullahi said. “When courts adjudicate financial and deposit insurance-related disputes, their rulings set precedents that influence regulatory practices, promote investor protection, and strengthen financial institutions.”
He also pointed to the rapidly evolving landscape of the financial sector, noting that the rise of digital banking, cryptocurrency, and decentralised finance (DeFi) demands a judiciary that is both agile and informed.
“These technological innovations are reshaping financial transactions and call for a Judiciary that is forward-looking and responsive to new challenges,” he concluded.
