George Ozalla
The Nigeria Deposit Insurance Corporation (NDIC) has moved to reinforce its legal authority in managing bank failures under the recently enacted Nigeria Deposit Insurance Corporation Act No 33 of 2023. The Corporation said the new framework limits the ability of courts to issue certain orders that could obstruct its statutory functions, including reimbursing depositors or acting as liquidator for failed banks. Section 69 of the Act restricts claimants from obtaining injunctions against the NDIC and caps liability to insured deposits or nominal share values.
The NDIC described the changes as critical for safeguarding depositors’ funds and ensuring stability within the banking sector. The revised law also enhances the Corporation’s autonomy, strengthens its supervisory powers, and gives it more authority to liquidate distressed institutions and recover their assets efficiently.
Officials noted that past court orders have sometimes disrupted liquidation processes by attaching NDIC accounts or restraining access to assets. The new Act is intended to prevent such obstacles, allowing the Corporation to act swiftly in resolving failed-bank cases. Observers suggest the reforms could restore depositor confidence and make bank resolutions faster and more predictable.
Despite the legal tightening, challenges remain. Some depositors of defunct banks continue to express frustration over delays and limitations in recovering uninsured deposits, highlighting that operational efficiency will remain key alongside the strengthened legal framework.
Background
The NDIC, charged with insuring deposits and managing the resolution of failed financial institutions, now operates under the NDIC Act 2023, which aligns Nigeria’s deposit insurance and bank resolution processes with international best practices while reinforcing the Corporation’s role in maintaining financial stability.
