The Nigeria Deposit Insurance Corporation (NDIC) says its legal and regulatory framework has been significantly strengthened to enhance its capacity to liquidate failed banks and hold those responsible for financial institution collapses accountable.
In a statement released on Sunday by Hawwau Gambo, Head of Communication and Public Affairs at NDIC, the Corporation’s Managing Director, Mr. Thompson Sunday, said the enactment of the NDIC Act No. 30 of 2023 had fortified the Corporation’s powers in bank liquidation and resolution processes.
According to him, the recent legal reforms, alongside provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020, have empowered the NDIC to effectively prosecute parties found culpable in bank failures.
“The NDIC is now better positioned to prosecute parties at fault in bank failures, unlike in the past when insufficient legal provisions allowed such individuals to evade accountability,” Sunday said.
He commended the National Assembly for addressing the long-standing gaps in the legal framework that had previously limited the Corporation’s effectiveness, and also lauded the judiciary for its growing expertise in deposit insurance law.
“Through more informed adjudication of failed bank cases, judgments are now bringing real relief to depositors,” he added.
Highlighting the impact of the stronger framework, Sunday cited the swift liquidation process of Heritage Bank Limited, noting that “the Corporation’s ability to realise sufficient assets to declare a first round of liquidation dividends to the uninsured depositors within one year of the revocation of its licence is due to the positive impact of the new legal framework.”
He revealed that more individuals and institutions are now opting for out-of-court settlements with the NDIC.
“With stronger legal backing, individuals now approach the Corporation to settle out of court—not necessarily because the law has caught up with them, but because they can see that the noose is tightening around those responsible for bank failures,” he said.
Sunday reaffirmed the NDIC’s commitment to leveraging its strengthened powers to protect depositors and promote financial system stability. “The Corporation will continue to work with stakeholders to ensure the effective discharge of its mandate,” he concluded.