NJI, NDIC Hold Seminar for Appeal Court Justices on Banking Sector Litigation
Wale Igbintade
Justices of the Court of Appeal gathered in Lagos for a sensitisation seminar aimed at strengthening judicial understanding of bank liquidation processes, depositor protection, and the growing complexities of financial sector litigation in Nigeria.
The seminar, themed “Enhancing the Efficacy of Bank Liquidation and Depositors’ Protection,” was organised by the Nigeria Deposit Insurance Corporation (NDIC) in collaboration with the National Judicial Institute (NJI).
Speakers at the event stressed the critical role of the judiciary, particularly the Court of Appeal, in resolving banking disputes, shaping financial jurisprudence, and sustaining public confidence in Nigeria’s banking system.
Opening the seminar, the Administrator of the NJI, Justice Babatunde Adejumo, said the programme reflected a deliberate effort to deepen institutional understanding between the judiciary and financial sector regulators.
According to him, the stability of financial institutions remains a matter of national importance because banking systems thrive on public confidence in both financial institutions and the legal frameworks governing them.
He warned that the collapse or distress of financial institutions often has far-reaching implications for depositors, creditors, businesses, and the wider economy.
“The stability of financial institutions remains a matter of considerable national importance,” he said.
“Banking systems function effectively where there is confidence in the institutions that support them and in the legal processes that govern their operations.
Hence, when financial institutions experience distress or collapse, the consequences are often far-reaching, affecting depositors, creditors, businesses, and public confidence in the broader financial system.”
Justice Adejumo noted that bank liquidation proceedings frequently involve complex legal and regulatory issues relating to creditor priorities, depositor reimbursement, statutory powers, and recovery mechanisms.
Also speaking, the Managing Director and Chief Executive Officer of the NDIC, Thompson Oludare Sunday, said the success of bank liquidation and distress resolution processes depends largely on the quality, consistency, and timeliness of judicial decisions.
Sunday, who was represented by the NDIC Executive Director, Corporate Services, Emily Osuji, said the liquidation of failed banks in Nigeria has become increasingly difficult due to hidden assets, weak collateral arrangements, competing creditor claims, and increasingly sophisticated financial transactions.
“In practice, the liquidation process is often complex and challenging. Assets may be concealed or dissipated by insiders prior to closure, while some loans may be inadequately collateralised, necessitating extensive asset tracing and recovery efforts,” he said.
According to him, the NDIC frequently handles disputes involving depositors, creditors, former bank employees, and other stakeholders over issues relating to entitlements, contractual obligations, creditor hierarchy, and asset recovery.
He warned that prolonged litigation arising from such disputes could slow liquidation proceedings and undermine public confidence in the banking sector.
Sunday stressed the need for sustained engagement between the judiciary and financial regulators as financial transactions become more sophisticated and regulatory frameworks continue to evolve.
“We are confident that enhanced appreciation of these processes will promote greater alignment between regulatory intent and judicial outcomes, reduce delays, minimise conflicting decisions, and ultimately strengthen public confidence in Nigeria’s banking and financial system,” he stated.
The NDIC boss also noted that sound judicial pronouncements remain critical to sustaining depositor confidence, investor trust, and overall economic stability.
He referenced international standards established by the Basel Committee on Banking Supervision and the International Association of Deposit Insurers, both of which emphasise the importance of efficient legal systems and independent judiciaries in resolving financial disputes.
In her remarks, the President of the Court of Appeal, Monica Dongban-Mensem, represented by Ali Abubakar Banandi, described the seminar as an important institutional collaboration aimed at improving judicial understanding of disputes involving financial institutions.
Banandi said previous engagements between the judiciary, the NDIC, and the NJI had enhanced judicial decision-making in banking and commercial matters.
“This series of interactions has no doubt assisted judges in their decision-making,” he said, while commending the calibre of speakers and discussants participating in the seminar.