The Nigeria Deposit Insurance Corporation (NDIC) yesterday highlighted that long judicial proceedings and execution of judgment against assets of the corporation for liability of banks in liquidation are some of the challenges faced by the corporation in discharging its duties.

Acting Managing Director/Chief Executive, Mrs. Emily Osuji, stated this in Lagos during the sensitisation seminar for judges of the Federal High Court with the theme, “Strengthening Adjudication and Depositor Confidence in the Banking System,” which was organised in collaboration with the National Judicial Institute.

She spoke just as the Chief Justice of Nigeria, Justice Kudirat Kekere-Ekun, called for a sound judicial approach to banking and financial adjudication, saying it fosters trust in the system, reassuring depositors that their assets are protected and reinforcing the integrity of the financial regulatory apparatus

The acting MD stated that the CBN and NDIC had recorded tremendous achievements particularly with the orderly and efficient closure of Heritage Bank.

However, she said despite the achievements recorded above, the corporation is still faced with some legal challenges that include long judicial proceedings and execution of judgment against assets of the corporation for liability of banks in liquidation.

She said, “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.

“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.”

The CJN stated that the complexities associated with banking litigation—ranging from insolvency proceedings to regulatory interventions—“demand a judiciary that is well-versed in the nuances of financial laws and deposit insurance policies.

“To achieve meaningful progress in this regard, it is crucial for judicial officers to embrace the principles of efficiency, transparency, and consistency in the adjudication process.

“The interpretation and application of legal statutes governing deposit insurance must be done with precision and an acute awareness of global best practices. Financial stability is a collective responsibility that requires synergy between the judiciary, regulators, and policymakers.”

One of the presenters and retired judge of the Federal High Court, Justice Ibrahim Buba, called for improved corporate governance in the financial sector to enhance the financial system stability.

“If you have crooks manning the system and then wrecking down banks and they cannot be tried, then we will not get anywhere. You can’t entrust your money. If you put your money in the banks and it is not safe, it will negatively impact the depositors,” he said. (Daily Trust)