The Nigeria Deposit Insurance Corporation (NDIC) has called for deeper collaboration with the Nigerian judiciary. The appeal was made on Monday at a sensitisation seminar organised for Federal High Court judges in Lagos, as the Corporation seeks to align legal interpretations with its mandate of maintaining financial system stability and protecting depositors.
Delivering her keynote address at the event themed “Strengthening Adjudication and Depositor Confidence in the Banking System,” the Acting Managing Director/CEO of NDIC, Mrs. Emily Osuji, expressed concern over court rulings that obstruct the Corporation’s role as liquidator of failed banks. She cited delays in judicial proceedings, unauthorized garnishee orders, and wrongful enforcement against NDIC assets as some of the persistent challenges that threaten swift bank resolution processes.
“The Corporation is still faced with some legal challenges, including long judicial proceedings and execution of judgments against assets of the Corporation for liabilities of banks in liquidation,” Osuji said.
She highlighted the relevance of Section 69 of the NDIC Act 2023, which expressly limits the issuance of restraining orders against the Corporation while it performs core functions such as reimbursing depositors or liquidating distressed banks. She emphasized that monetary damages — not injunctive relief — should be the prescribed remedy in such cases, and only within defined limits, including insured deposit thresholds for depositors and nominal share values for shareholders.
Despite the legal safeguards, Osuji noted that courts have continued to entertain lawsuits against failed institutions and the NDIC without statutory “leave,” while garnishee proceedings are still being enforced contrary to the law.
“This undermines the NDIC’s effectiveness and delays the resolution of failed banks. Ongoing proceedings in the liquidation of Heritage Bank serve as a crucial case study in the operationalization of the new Act,” she added.
Representing the Chief Justice of Nigeria, Justice Kudirat Kekere-Ekun, Justice Inyang Okoro, Chairman of the Education Committee of the National Judicial Institute (NJI), acknowledged the seminar’s importance, saying it would help equip judges to make timely and legally sound decisions on financial matters.
“A stable and resilient financial system is vital to economic prosperity, and the courts are critical in ensuring that financial disputes are adjudicated fairly and promptly,” Justice Okoro said.
He also raised concerns about the rapid evolution of the financial ecosystem, especially the rise of fintech, decentralized finance, and digital banking, which he said demand modernised legal interpretation and cross-sectoral collaboration.
“The emergence of fintech adds complexity to deposit insurance regulation, and judicial officers must be forward-thinking to keep pace with the financial sector’s transformation,” he stated.
The NDIC, as Nigeria’s foremost deposit insurer, plays a central role in deposit reimbursement, bank resolution, and systemic risk mitigation. However, the judicial constraints it faces, especially during liquidation or in crisis resolution scenarios, often slow down its interventions, indirectly eroding public trust in the financial safety net.
Industry observers say that a synchronised approach between the judiciary and the financial regulatory ecosystem is crucial to safeguard depositor confidence and minimise disruptions in Nigeria’s banking system. With the NDIC having recently overseen the resolution of Heritage Bank, the urgency to institutionalise judicial awareness of financial regulatory laws has grown significantly.
Legal analysts also point out that delays in liquidating failed banks often result in reduced asset recoveries, delayed depositor reimbursement, and overall erosion of confidence in the formal banking system, particularly in a volatile economic environment.