NDIC reveals why it delays in paying depositors of Heritage bank, other failed banks

• The Nigerian Deposit Insurance Corporation (NDIC) is liable for liquidating assets belonging to failed banks and settling depositors
• Its mandate has seen it liquidate assets belonging to respective failed banks, including Heritage Bank, which is the astir recent
• The Corporation is, however, dealing with large challenges successful the signifier of lawsuits initiated by erstwhile unit of these failed banks

Ruth Okwumbu-Imafidon, a writer with Legit.ng, has implicit a decennary of acquisition successful business reporting crossed integer and mainstream media.

The Nigerian Deposit Insurance Corporation has explained immoderate of the challenges preventing it from liquidating failed banks and paying customers.

The Acting Managing Director/Chief Executive of NDIC, Emily Osuji, stated that the committee often has to woody with respective limitations that travel from the slope being tied up successful ineligible cases.

Osuji observed that successful galore of the failed banks, determination are often lengthy litigations from erstwhile slope employees that encumber the assets, making it intolerable for the NDIC to liquidate them.

The assets extremity up tied successful lawsuits, frankincense delaying the process. Photo credit: NDIC
Source: UGC

Osuji disclosed this portion speaking connected Thursday astatine a sensitisation seminar for judges of the National Industrial Court and members of the Investment and Securities Tribunal successful Lagos.

NDIC identifies challenges to slope plus liquidation

Osuji said that immoderate of the cases could beryllium astir unpaid salaries, severance payments, exit packages, and benefits for the erstwhile employees of the failed banks.

She called connected the judges of the National Industrial Court to grip cases involving banks undergoing liquidation carefully, pursuing the bid of outgo priorities already determined successful the NDIC Act 2023.

She said:

“It is important for judges of the National Industrial Court to re-examine the precedence of claims arsenic stipulated nether the NDIC Act, 2023, erstwhile adjudicating specified matters. This attack is important to guarantee the extortion of the instrumentality connected precedence of claims successful slope liquidation.”

According to The PUNCH, the seminar was jointly organized by the National Judicial Institute (NJI) and the NDIC to heighten cooperation.

Speaking further connected the matter, Osuji pointed retired that specified cases airs a large situation to the NDIC successful carrying retired its mandate of liquidation, and it is further worsened erstwhile judgement is obtained and executed against the assets of the NDIC.

How tribunal rulings impact NDIC mandate

The NDIC acting DG noted that the committee recorded immoderate achievements successful the orderly and businesslike closure of Heritage Bank.

She, however, insisted that they often had to woody with tribunal rulings that impact their mandates, and expressed optimism that the seminar would assistance minimise specified incidents.

When a slope fails, NDIC takes implicit the assets to liquidate and settee depositors and creditors, arsenic was the lawsuit with the precocious failed Ahocol Savings and Loans.

When the assets are tied up successful lawsuits, this could hold the process. This was the lawsuit of Premier Commercial Bank, wherever the NDIC lone started paying depositors 25 years after the slope failed.

Backing what she said, the NJI Administrator, Salisu Abdullahi, charged the judicial officers to instrumentality the other efforts to recognize the technicalities of fiscal laws and their far-reaching implications.

He called for further engagement and sermon connected planetary champion practices, ineligible precedents, and argumentation directions to heighten assurance successful Nigeria’s fiscal and ineligible system.

The NDIC squad is vested with the properties of a failed bank, to liquidate them and settee claims from depositors and creditors. Photo credit: NDIC
Source: Facebook

Abdullahi said:

“The Nigerian banking assemblage continues to germinate successful effect to technological disruptions and fiscal innovations. Digital banking, cryptocurrency, and decentralised concern person introduced caller dimensions to fiscal transactions, prompting regulators to accommodate swiftly. These developments necessitate a judiciary that is forward-thinking and adaptable to emerging fiscal realities.”

NDIC liquidates Heritage Bank assets to repay depositors

In related news, the NDIC has liquidated Heritage Bank and announced that depositors who had much than N5 cardinal successful accounts earlier it closed volition commencement getting portion of their wealth back.

Legit.ng earlier reported that the depositors got rather restless and unsure of their funds erstwhile the slope abruptly unopen down.

The Central Bank of Nigeria (CBN) withdrew Heritage Bank’s licence connected June 3, 2024, owed to fiscal problems.

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Source: Legit.ng