The Nigeria Deposit Insurance Corporation has sought an improved collaboration with the nation’s judicial system to mitigate some of its lingering legal challenges, which include protracted litigations and court orders that restrict its mandate.
This call was made at the opening of a sensitisation seminar for Federal High Court judges held in Lagos on Monday, where the NDIC noted that a stronger collaboration between it and the National Judicial Institute would enhance depositor protection and maintain the stability of Nigeria’s banking sector.
Speaking at the seminar, the Acting Managing Director/Chief Executive of the NDIC, Mrs Emily Osuji, said the Corporation continues to contend with legal challenges that affect the timely resolution of failed banks despite landmark progress, including the prompt closure of Heritage Bank.
In her address, Osuji, who spoke on the theme ‘Strengthening Adjudication and Depositor Confidence in the Banking System’, lauded the judiciary for its ongoing support but noted challenges ranging from protracted litigation and improper garnishee orders to enforcement actions taken against NDIC assets.
Osuji said, “The Corporation is still faced with some legal challenges that include long judicial proceedings and execution of judgement against assets of the Corporation for liability of banks in liquidation. Recent proceedings concerning the liquidation of Heritage Bank have presented opportunities to observe the application of the NDIC Act 2023, particularly section 69 of the Act, which restricts the court from issuing certain orders against the NDIC when it is performing its core mandates, such as reimbursing insured deposits or acting as a liquidator. This section further charges a claimant who has an issue with the NDIC in these scenarios to only seek recourse of monetary damages, and these are capped at specific amounts (e.g., the insured deposit for depositors or the nominal share value for shareholders).
“However, the Corporation’s discharge of the aforementioned mandate had, in some instances, been restricted by court orders. Furthermore, legal actions are being entertained against failed insured institutions and the NDIC without leave, notwithstanding the provisions of the law prohibiting the same. Similarly, enforcement actions, such as garnishee orders or attachments, against the NDIC itself or the assets of failed insured institutions are permitted by the court.”
She went on to call for continued engagement with the judiciary to uphold the integrity of the deposit insurance system and ensure that failed bank resolutions do not suffer undue legal bottlenecks.
Speaking on behalf of the Chief Justice of Nigeria, Kudirat Kekere-Ekun, the Chairman of the Education Committee of the NJI, Board of Governors, Justice Inyang Okoro, highlighted the importance of the seminar, noting that it was key in equipping judges with the tools to fairly and efficiently adjudicate financial disputes.
“The financial sector is the lifeblood of any nation’s economy. A stable and resilient financial system is fundamental to economic prosperity, and at the heart of this stability lies an effective deposit insurance mechanism,” Okoro said.
He added, “The theme of this seminar aptly captures the urgent need for judicial officers to be adequately equipped in adjudicating matters relating to deposit insurance. The courts serve as the final arbiters in financial disputes, and as such, our role in ensuring fair, timely, and legally sound resolutions cannot be compromised.”
Okoro further highlighted the emergence of fintech and digital finance as added pressure points for adjudication and policy coherence.
He said the rise of decentralised finance “presents new challenges for deposit insurance regulations” and called on judicial officers to be “forward-thinking in addressing emerging complexities.”
