The Nigeria Deposit Insurance Corporation (NDIC) has urged its external solicitors to intensify efforts in recovering assets of closed banks to ensure the payment of uninsured deposits, legitimate creditor claims, and liquidation dividends to investors. The Managing Director of NDIC, Dr. Bello Hassan, made the call during a sensitization seminar for the corporation’s external solicitors held in Abuja on Thursday.
Dr. Hassan emphasized the complexity of bank liquidation and the critical role of lawyers in the process, particularly in light of the recent failure of Heritage Bank. He noted that the NDIC, as the liquidator of failed banks, relies heavily on legal expertise to recover debts and realize assets, which are essential for fulfilling its mandate.
The Role of Lawyers in Bank Liquidation
Speaking at the event, Dr. Hassan highlighted the intricate nature of bank liquidation and the importance of collaboration with external solicitors. “Liquidation, by its nature, is intertwined with litigation. The NDIC, in fulfilling its responsibilities, engages in legal proceedings both as plaintiff and defendant, representing the interests of depositors and creditors while also pursuing debt recovery from debtors of closed banks,” he said.
He added that the recovery of debts and realization of assets are crucial to achieving the corporation’s objectives. “Beyond paying the insured sums to depositors from the Corporation’s deposit insurance funds (DIF), the NDIC as liquidator is also obligated to settle uninsured portions of deposits and all legitimate creditor claims from the realized assets of the insured institution in liquidation,” Dr. Hassan explained.
Challenges and Call for Diligence
While acknowledging the challenges faced by lawyers in the litigation process, Dr. Hassan urged them to remain diligent in their efforts to assist the NDIC. “We urge you to continue your diligent efforts in assisting the Corporation with debt recovery and asset realization,” he said. He emphasized that the success of the NDIC’s mandate depends on the effective collaboration of all stakeholders, including external solicitors.
NDIC’s Core Mandates
Dr. Hassan outlined the four core mandates of the NDIC as enshrined in the Nigeria Deposit Insurance Act 2023: deposit guarantee, bank supervision, resolution of failing financial institutions, and the orderly liquidation of banks whose licenses have been revoked by the Central Bank of Nigeria (CBN). He noted that the liquidation of failed banks is a critical function that requires the support of lawyers to maintain the stability of the financial system.
“NDIC deeply 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,” he added.
Importance of Asset Recovery
The recovery of assets from closed banks is vital for ensuring that depositors and creditors receive their due payments. The NDIC’s efforts in this regard are aimed at protecting the interests of depositors, maintaining public confidence in the banking system, and promoting financial stability. The corporation’s external solicitors play a pivotal role in this process by pursuing legal avenues to recover debts and realize assets.
The sensitization seminar for NDIC’s external solicitors underscores the importance of collaboration between the corporation and legal professionals in addressing the challenges of bank liquidation. As the NDIC continues to fulfill its mandate, the support of external solicitors will be crucial in recovering assets, settling claims, and maintaining the stability of Nigeria’s financial system.
Dr. Hassan’s call for enhanced efforts in asset recovery highlights the need for diligence, professionalism, and commitment from all stakeholders. With the continued support of its external solicitors, the NDIC is well-positioned to achieve its objectives and safeguard the interests of depositors and creditors in Nigeria’s banking sector.
