Stronger laws empower NDIC to enforce bank liquidation mandate

The Nigeria Deposit Insurance Corporation (NDIC) is now operating under stronger, more effective laws to execute its mandate to liquidate banks, according to its managing director and chief executive, Thompson Oludare Sunday.

Sunday stated this when he received the President/Chairman of the Council of the Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN), Chimezie Victor Ihekweazu, and members of his council during a courtesy visit to the NDIC headquarters in Abuja.

He said the corporation’s powers in liquidating failed insured institutions had been significantly strengthened through the enactment of the NDIC Act No. 30 of 2023 and the Banks and Other Financial Institutions Act (BOFIA) 2020. These laws, he noted, now enable the NDIC to prosecute individuals responsible for bank failures — a shift from the past, when weak legal provisions allowed many to evade accountability.

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Sunday commended the National Assembly for addressing what he described as a long-standing gap in the legal framework governing deposit insurance, as well as the judiciary for its growing expertise in adjudicating failed-bank cases.

“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,” he said. “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.”

Sunday attributed the NDIC’s ability to realise sufficient assets to declare a first round of liquidation dividends to uninsured depositors of the defunct Heritage Bank Limited — within one year of its licence revocation — to the positive impact of the strengthened legal regime. He added that the corporation would continue leveraging the new framework while deepening collaboration with BRIPAN and other stakeholders.

In his remarks, BRIPAN President/Chairman of Council, Chimezie Victor Ihekweazu, highlighted the association’s progress in harmonising insolvency-related laws into a unified national framework. He said this has improved the effectiveness of business recovery and introduced more viable insolvency-resolution options.

Ihekweazu also underscored BRIPAN’s commitment to capacity building and called for deeper cooperation with the NDIC, stressing the need for stronger stakeholder collaboration to enhance insolvency and business recovery practices in Nigeria.