The Nigerian Deposit Insurance Corporation has raised concerns that ongoing legal battles initiated by former employees of failed banks are hindering its core mandate of liquidating insolvent financial institutions.
The acting Managing Director/Chief Executive of NDIC, Emily Osuji, made the remarks on Thursday during a sensitisation seminar held in Lagos for judges of the National Industrial Court and members of the Investments and Securities Tribunal. The event, jointly organised with the National Judicial Institute, aimed to foster stronger collaboration between the judiciary and financial regulators.
Osuji stressed that while the NDIC had achieved some notable successes — including the recent orderly closure of Heritage Bank — litigations over severance pay, unpaid salaries, and other employment claims pose significant legal and operational challenges.
“Employment cases initiated by former staff of failed banks, especially those before the National Industrial Court, present a major challenge to the NDIC’s liquidation mandate,” she said. “This becomes even more difficult when court judgments allow such claims to be executed against the Corporation’s assets.”
She urged judges to uphold the payment priority structure outlined in the recently enacted NDIC Act, 2023. “Cases involving severance packages and salary arrears must be carefully examined in line with the priority of claims set by the law to ensure fairness and legal consistency during bank liquidation,” Osuji added.
The NDIC boss also noted that the corporation is ramping up public awareness campaigns and deepening engagement with the judiciary to address recurring challenges in the liquidation process. “These efforts are aligned with international best practices and the Core Principles for Effective Deposit Insurance Systems as defined by the International Association of Deposit Insurers,” she said.
In his welcome address, NJI Administrator Justice Salisu Abdullahi emphasized the critical role of the judiciary in maintaining financial system stability. He called on judges to build capacity in emerging areas of financial law, particularly as the banking landscape continues to evolve with the rise of digital banking, cryptocurrencies, and decentralized finance.
“It is imperative for judicial officers to grasp both the complexities of financial law and their broader impact on economic stability,” Abdullahi said. “This seminar provides a platform for discourse on global best practices, legal precedents, and forward-looking policies that will enhance adjudicatory efficiency and strengthen public confidence in Nigeria’s financial system.”
As Nigeria’s financial sector undergoes transformation, both the NDIC and judicial leaders agree that sustained collaboration between regulators and the courts is key to protecting depositors and ensuring a sound banking environment.
