The Managing Director and Chief Executive of Nigerian Deposit Insurance (NDIC), Hassan Bello is soliciting the support of the appellate court towards adopting a practice direction for court of appeal on failed banks matters in order to ease recovery of debts owed failed banks and prosecution of parties that may have contributed to the failure of the bank.
Hassan Hello made this call at this year’s sensitization seminar for justices of the appeal court titled: Building Strong Depositors Confidence in Banks and Other Financial institutions through Adjudication of Disputes, held on Monday, May 13, 2024 in Lagos.
He ” urged the appellate
Court to consider having Practice Direction for Court of Appeal on failed banks matters. This we believe, will provide for quick and effective dispensation of appeal matters relating to recovery of debts owed failed banks, as well as, prosecution of parties at fault that might have contributed to the failure of their banks.”
Bello, explained that the choice of the theme was
a deliberate measure designed to re-echo the huge responsibility placed on the corporation as Deposit Insurer and the need to collaborate with critical stakeholders such as the judiciary in ensuring safe and sound Financial system in Nigeria.
According to him, the mandate of the corporation covers Deposit guarantee, bank supervision, failure resolution, and liquidation, and in discharging these functions ,especially resolution of banking distress,and liquidation of failed banks , some complex legal issues bordering on administration of Deposit Insurance may be brought before the lordships for determination of rights of parties. Hence the need for proper understanding of the concepts and practice of deposits Insurance so as to enable the lordships to appreciate the legal issues involved in determining the cases expeditiously.
Their pronouncements on these sensitive issues, the NDIC boss noted will set judicial precedents in the development of bank insolvency law and practice in Nigeria in the emerging legal jurisprudence.
He maintained that the recent upwards review of maximum deposit Insurance coverage levels approved by the Interim Management Committee of the Corporation , which raised Deposit coverage of Deposit Money Banks (DMBs) and Subscribers of Mobile Money Operators (MMOs) from N500 ,000 to N5,000,000; and Payments System Service Banks(PSBs) and Primary Mortgage Banks (PMBs) from N500, 000 to N2,000,000 was designed to promote depositors confidence within the banking system.
While acknowledging the presence of the President of Court of appeal, Justice M.B Dongban-Mensem and other appeal court Justices present, Bello said that it was an eloquent testament of the judiciary to ensure a safe and sound banking for the country.
Bello insisted that previous Sensitization seminars had drastically reduced the challenge of liquidation litigation it experienced in the past; fostered better understanding of the roles of the corporation and provided opportunity for the justices and paper presenters and senior members of the bar to brainstorm on salient provisions of the failed Banks (Recovery of debts and Financial Malpractices in Banks) Act 1994.
He expressed hope that the end of the seminar, participants would have learnt something towards building of strong depositors confidence on banks and other financial institutions.