NDIC Strengthens Legal Framework for Bank Failures
The Managing Director and Chief Executive Officer of the Nigeria Deposit Insurance Corporation (NDIC), Mr. Thompson Oludare Sunday, has declared that the corporation now operates under significantly stronger legal provisions to execute its bank liquidation mandate effectively.
This announcement was made during a courtesy visit by the President and Chairman of Council of the Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN), Mr. Chimezie Victor Ihekweazu, and his delegation to the NDIC headquarters in Abuja over the weekend.
Enhanced Legal Powers for Prosecution
According to the NDIC boss, the enactment of NDIC Act No. 30 of 2023, combined with the Banks and Other Financial Institutions Act (BOFIA) 2020, has substantially boosted the corporation's authority in liquidating failed insured institutions.
Mr. Sunday emphasized that these legal enhancements now position the NDIC more effectively to prosecute parties responsible for bank failures, addressing previous limitations where inadequate legal frameworks allowed culprits to avoid accountability.
"The enhanced powers granted to the Corporation under the NDIC Act 30 of 2023, the BOFIA 2020 and the improved understanding of the judiciary, have made it impossible for individuals to hide under the law to escape liability," the NDIC Chief Executive stated.
Positive Outcomes and Judicial Cooperation
The NDIC CEO expressed gratitude to the National Assembly for resolving the long-standing challenge of a weak legal framework that had previously constrained the corporation's operations.
He also acknowledged the judiciary's growing expertise in deposit insurance law and practice, noting that effective adjudication of failed bank cases has resulted in judgments providing relief to depositors.
A significant demonstration of the new framework's effectiveness is the corporation's ability to realize sufficient assets to declare a first round of liquidation dividends to uninsured depositors of the defunct Heritage Bank Limited within just one year of its license revocation.
Mr. Sunday revealed that with stronger legal backing, individuals are now approaching the corporation for out-of-court settlements, recognizing that accountability mechanisms have significantly tightened.
The NDIC boss reiterated the corporation's commitment to leveraging these strengthened laws while collaborating with BRIPAN and other stakeholders to enhance the effective discharge of its mandate.
BRIPAN's Harmonization Efforts
In his response, BRIPAN President Mr. Chimezie Victor Ihekweazu highlighted the association's achievement in harmonizing all insolvency-related laws in Nigeria into a unified framework.
He noted that this harmonization has substantially addressed challenges of ineffective insolvency and business recovery practices while introducing more viable options for solvency resolution.
Mr. Ihekweazu emphasized BRIPAN's strong focus on capacity building and called for enhanced collaboration between the corporation and his association, as well as closer cooperation among all stakeholders to strengthen insolvency and business recovery practices across Nigeria.
