Wale Igbintade
Justices of the Court of Appeal gathered in Lagos for a sensitisation seminar aimed at strengthening judicial understanding of bank liquidation processes, depositor protection, and the growing complexities of financial sector litigation in Nigeria.
The seminar, themed, “Enhancing the Efficacy of Bank Liquidation and Depositors’ Protection,” was organised by Nigeria Deposit Insurance Corporation (NDIC), in collaboration with National Judicial Institute (NJI).
Speakers at the event stressed the critical role of the judiciary, particularly the Court of Appeal, in resolving banking disputes, shaping financial jurisprudence, and sustaining public confidence in Nigeria’s banking system.
Opening the seminar, Administrator of NJI, Justice Babatunde Adejumo, said the programme reflected a deliberate effort to deepen institutional understanding between the judiciary and financial sector regulators.
According to Adejumo, the stability of financial institutions remains a matter of national importance because banking systems thrive on public confidence in both financial institutions and the legal frameworks governing them.
He warned that the collapse or distress of financial institutions often had far-reaching implications for depositors, creditors, businesses, and the wider economy.
“The stability of financial institutions remains a matter of considerable national importance,” he said.
Adejumo stated, “Banking systems function effectively where there is confidence in the institutions that support them and in the legal processes that govern their operations.
“Hence, when financial institutions experience distress or collapse, the consequences are often far-reaching, affecting depositors, creditors, businesses, and public confidence in the broader financial system.”
He said bank liquidation proceedings frequently involved complex legal and regulatory issues relating to creditor priorities, depositor reimbursement, statutory powers, and recovery mechanisms.
Managing Director and Chief Executive Officer of NDIC, Thompson Sunday, said the success of bank liquidation and distress resolution processes depended largely on the quality, consistency, and timeliness of judicial decisions.
Sunday, represented by NDIC’s Executive Director, Corporate Services, Emily Osuji, said the liquidation of failed banks in Nigeria had become increasingly difficult due to hidden assets, weak collateral arrangements, competing creditor claims, and increasingly sophisticated financial transactions.
He stated, “In practice, the liquidation process is often complex and challenging. Assets may be concealed or dissipated by insiders prior to closure, while some loans may be inadequately collateralised, necessitating extensive asset tracing and recovery efforts.”
According to him, NDIC frequently handles disputes involving depositors, creditors, former bank employees, and other stakeholders over issues relating to entitlements, contractual obligations, creditor hierarchy, and asset recovery.
He warned that prolonged litigation arising from such disputes could slow liquidation proceedings and undermine public confidence in the banking sector.
Sunday stressed the need for sustained engagement between the judiciary and financial regulators as financial transactions become more sophisticated and regulatory frameworks continue to evolve.
He stated, “We are confident that enhanced appreciation of these processes will promote greater alignment between regulatory intent and judicial outcomes, reduce delays, minimise conflicting decisions, and ultimately strengthen public confidence in Nigeria’s banking and financial system.”
The NDIC boss also said sound judicial pronouncements were critical to sustaining depositor confidence, investor trust, and overall economic stability.
He referenced international standards established by Basel Committee on Banking Supervision and International Association of Deposit Insurers, both of which emphasised the importance of efficient legal systems and independent judiciaries in resolving financial disputes.
In her remarks, President of the Court of Appeal, Monica Dongban-Mensem, represented by Ali Banandi, described the seminar as an important institutional collaboration aimed at improving judicial understanding of disputes involving financial institutions.
Dongban-Mensem said previous engagements between the judiciary, NDIC, and NJI had enhanced judicial decision-making in banking and commercial matters.
“This series of interactions has no doubt assisted judges in their decision-making,” she said, while commending the calibre of speakers and discussants participating in the seminar.