Legal practitioners have a critical role to play towards the orderly liquidation of banks and maintenance of the financial system stability, the Nigerian Deposit Insurance Corporation (NDIC) has said.
The Managing Director /Chief Executive of the NDIC, Bello Hassan stated this in a keynote address he sent to the annual sensitization seminar for external solicitors in Abuja.
The theme of the seminar was “Consolidating collaborative efforts in mastering the deposit insurance scheme and bank resolution.”
Mr Hassan who was represented by the Deputy Director in the Legal Department of the Corporation, Hajia Ramotu Abdulahi, said the recent failure of Heritage Bank and its liquidation by the Central Bank of Nigeria highlighted the vital role of collaboration with the external solicitors.
Of the four core mandates of the NDIC enshrined in the Nigeria Deposit Insurance Act 2023, namely deposit guarantee, bank supervision, resolution of failing financial institutions, and the orderly liquidation of banks whose licenses have been revoked by the CBN, the MD said liquidation was the most critical.
Liquidation, he explained, requires the support of the legal practitioners to efficiently resolve, to maintain the stability of the financial system.
Citing the example of the recent failure of Heritage Bank, Hassan said the process highlighted the intricate nature of bank liquidation and the vital role of collaboration with external solicitors.
He said liquidation, by its nature, was intertwined with litigation, as the Corporation would need engage in legal proceedings both as plaintiff and defendant, representing the interests of depositors and creditors, while also pursuing debt recovery from debtors of the closed banks and realization of their assets to discharge its corporate responsibilities.
Beyond paying the insured sums to depositors from the Corporation’s deposit insurance funds (DIF), the MD said the NDIC as liquidator was also under an obligation to settle the uninsured portion of deposits and all legitimate creditor claims from the realised assets of the insured institution in-liquidation.
He attributed the consistent fulfillment of the Corporation’s official responsibility to the collaborative partnerships with external solicitors.
Urging the Solicitors to continue to assist the Corporation with debt recovery and asset realization responsibilities, he said the NDIC values its stakeholders as essential partners in achieving its corporate objectives.
“We actively seek your continued collaboration and support in promoting financial system stability through a deeper understanding of the dynamics of the Deposit Insurance System in Nigeria, resulting in positive outcomes, including increased diligence in handling NDIC cases, more informed judicial decisions, encouraging feedback from both the bar and the bench, and a broader public awareness of deposit insurance practices,” he said.
He pointed out that the seminar was organised to further strengthen NDIC’s relationship with its external solicitors, to serve the interests of bank depositors and the Nigerian financial system.
The failure of Heritage Bank, he said, necessitated the convening of the workshop for the newly engaged external solicitors, many of whom may not have benefited from previous seminars.
The seminar was organised to properly position the Solicitors to support the Corporation in promoting financial system stability through a deeper understanding of the dynamics of the Deposit Insurance System in Nigeria.
