The Nigeria Deposit Insurance Corporation (NDIC) has announced a significant enhancement of its legal powers to prosecute individuals and organizations responsible for bank failures across the country. This development comes through the enactment of new legislation that closes previous loopholes enabling culprits to evade accountability.
Strengthened Legal Framework
According to NDIC Managing Director Thompson Sunday, the Corporation now operates under strengthened legal backing provided by the NDIC Act No. 30 of 2023 and the Banks and Other Financial Institutions Act (BOFIA) 2020. These legislative reforms have substantially enhanced the Corporation's capacity to effectively liquidate failed financial institutions and prosecute parties at fault.
Sunday made these revelations during a meeting with the President of the Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN), Mr. Chimezie Victor Ihekweazu (SAN), and his council members at the NDIC headquarters in Abuja.
End of Impunity Era
The NDIC chief emphasized that the new legal framework has fundamentally changed the landscape of bank failure accountability. Individuals can no longer hide behind legal technicalities to escape liability for their roles in bank collapses that have historically affected the Nigerian financial system.
Sunday noted an interesting shift in behavior since the laws took effect, stating: "Today, many approach the NDIC to settle voluntarily, aware that the noose is tightening." This indicates a growing recognition among potential offenders of the strengthened enforcement capabilities now available to the Corporation.
Heritage Bank Liquidation Progress
In a demonstration of the practical benefits of these legal reforms, the NDIC has successfully declared the first round of liquidation dividends to uninsured depositors of Heritage Bank. This development comes approximately one year after the Central Bank of Nigeria revoked Heritage Bank's license on June 3, 2024.
The Managing Director credited the legal framework for enabling this rapid progress, noting that the Corporation's ability to realize sufficient assets within such a short timeframe directly results from the enhanced powers provided by the new laws.
The NDIC had commenced the sale of Heritage Bank's assets by the last quarter of 2024, following the license revocation due to the bank's financial challenges.
Addressing Recovery Delays
The Corporation also addressed common concerns about delays in deposit recovery for customers of failed banks. According to the NDIC, such delays typically result from multiple litigations that often precede bank collapses.
These legal challenges frequently involve lawsuits filed by former employees concerning various employment matters including:
- Unpaid salaries and benefits
- Severance payments
- Exit packages
- Other employment-related compensations
The new legal framework aims to streamline these processes while ensuring that depositors receive their funds in a more timely manner, without compromising the rights of other stakeholders.
This development represents a significant step forward in strengthening Nigeria's financial system stability and protecting depositor interests through enhanced regulatory enforcement capabilities.
