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The Nigeria Deposit Insurance Corporation (NDIC) has enlisted the support of external solicitors to enhance its debt recovery and asset realization strategies, reinforcing its commitment to protecting depositors and ensuring financial stability.
This was disclosed by NDIC Managing Director/Chief Executive, Bello Hassan, during the 2024 Sensitization Seminar for External Solicitors, held in Lagos under the theme: “Consolidating the Collaborative Efforts in Mastering Deposit Insurance Scheme & Bank Resolution.”
Strengthening Bank Supervision and Resolution
As part of its mandate, the NDIC supervises financial institutions to safeguard depositors’ funds, promote monetary stability, and efficiently resolve failing and failed banks. Addressing participants at the event, Hassan—represented by Head of the Legal Department, Henry Fomah—emphasized the pivotal role of external solicitors in handling legal proceedings and litigation associated with bank liquidation.
Following the collapse of Heritage Bank in June 2024, the NDIC appointed new external solicitors to bolster its debt recovery and asset liquidation processes. Hassan underscored the complexities of bank liquidation, stating:
“The recent failure of Heritage Bank highlighted the intricate nature of bank liquidation and the vital role of collaboration with our external solicitors. Liquidation, by its nature, is intertwined with litigation.”
In fulfilling its responsibilities, the NDIC engages in legal proceedings both as plaintiff and defendant, representing the interests of depositors and creditors while also pursuing debt recovery from debtors of failed banks. The realization of these assets remains crucial to NDIC’s corporate objectives.
Commitment to Depositor Protection and Financial Stability
Beyond compensating insured depositors through the Deposit Insurance Fund, the NDIC, as liquidator, is also responsible for settling the uninsured portion of deposits and legitimate creditor claims from the realized assets of failed banks.
“I am pleased to report that the Corporation has consistently fulfilled this responsibility, a success largely attributable to our collaborative partnerships, including the invaluable contributions of our external solicitors,” Hassan stated.
While acknowledging the legal challenges encountered in litigation, he urged external solicitors to maintain their dedication to debt recovery and asset realization, emphasizing the positive outcomes of their engagements. These include:
- Enhanced diligence in handling NDIC cases
- More informed judicial decisions
- Increased public awareness of deposit insurance practices
- Encouraging feedback from legal professionals and the judiciary
Enhancing Legal Expertise for Bank Liquidation
This year’s seminar aimed to strengthen collaboration with NDIC’s legal partners, particularly following the engagement of new external solicitors after Heritage Bank’s failure. Hassan noted that many of these solicitors may not have benefited from previous workshops, making the training initiative essential to aligning them with NDIC’s strategic objectives.
Fomah, in his welcome address, highlighted key presentations delivered during the seminar, including:
“Navigating Bank Failure & Debt Recovery to Maintain Systemic Stability in Nigeria” – Justice Ibrahim Buba (Retired)
“Repercussions and Recovery Strategies for Debts Owed to Failed Banks” – Dr. Francis Agbu, SAN
“Legal and Practical Considerations in Winding Up Failed Banks” – Chris Umar, SAN
Through these expert insights, the NDIC seeks to refine its legal strategies, ensuring efficient debt recovery and financial system stability in Nigeria.
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