The Nigeria Deposit Insurance Corporation (NDIC) has announced that its laws have been strengthened, enabling it to more effectively carry out its bank liquidation mandate. According to a statement issued by the NDIC’s Head of Communication and Public Affairs, Hawwau Gambo, the Corporation’s Managing Director, Bello Hassan, stated that the NDIC’s powers in liquidating failed insured institutions have been enhanced with the enactment of the NDIC Act No. 30 of 2023.
The NDIC Act, along with the Banks and Other Financial Institutions Act (BOFIA) 2020, has empowered the Corporation to prosecute parties responsible for bank failures, addressing a long-standing challenge of weak legal provisions that had constrained its operations. The Managing Director commended the National Assembly for addressing this challenge and the judiciary for its growing expertise in deposit insurance law and practice.
As a result of the strengthened legal framework, individuals are now more likely to settle out of court, demonstrating the effectiveness of the new laws. The Corporation’s ability to realize sufficient assets to declare a first round of liquidation dividends to the uninsured depositors of defunct Heritage Bank Limited within one year of the revocation of its license is a testament to the positive impact of the new legal framework.
The NDIC’s enhanced powers will enable it to better protect depositors and maintain stability in the financial system. The Corporation will continue to leverage the strengthened laws while collaborating with stakeholders to enhance the effective discharge of its mandate. With its improved legal backing, the NDIC is well-positioned to address bank failures and ensure that those responsible are held accountable.
The development is significant, as it demonstrates the Nigerian government’s commitment to strengthening the financial system and protecting depositors. The NDIC’s ability to effectively liquidate failed banks and recover assets will help to maintain confidence in the banking system and promote financial stability. As the Corporation continues to implement its strengthened mandate, it is expected to have a positive impact on the Nigerian economy and the financial sector as a whole.