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HomeBusinessLawsuits from Ex-Bank Workers Hindering Liquidation Process - NDIC

Lawsuits from Ex-Bank Workers Hindering Liquidation Process – NDIC

Lawsuits from Ex-Bank Workers Hindering Liquidation Process – NDIC

 

The Nigerian Deposit Insurance Corporation (NDIC) has said that litigations by former bank employees affect its mandate of liquidating failed banks.

This was disclosed by the acting Managing Director/Chief Executive of NDIC, Emily Osuji, on Thursday at a sensitisation seminar for judges of the National Industrial Court and members of the Investment and Securities Tribunal in Lagos.

The seminar was organised by NDIC and the National Judicial Institute to enhance cooperation between the stakeholders.

Speaking at the seminar, Osuji noted that cases about unpaid salaries, severance pay, and other benefits for former employees of failed banks must be handled carefully.

She urged judges at the National Industrial Court to follow the order of payment priorities set by the NDIC Act, 2023, when deciding these cases.

“Cases involving severance packages, outstanding salary arrears, and exit packages for former employees of banks undergoing liquidation warrant careful consideration. It is important for judges of the National Industrial Court to re-examine the priority of claims as stipulated under the NDIC Act, 2023, when adjudicating such matters. This approach is crucial to ensure the protection of the law on priority of claims in bank liquidation.

“Employment cases initiated by former staff of failed banks against the Nigeria Deposit Insurance Corporation, particularly those litigated before the National Industrial Court, present a significant challenge to the NDIC’s mandate of liquidation.

This challenge is particularly pronounced when judgements obtained by former bank employees and officers are executed against the assets of the Corporation,” she said.

Osuji added that while the Corporation had recorded some achievements, particularly the orderly and efficient closure of Heritage Bank, these lawsuits from former bank employees and court rulings affected its mandate.

She noted that the Corporation, in its bid to address some of the identified challenges, has improved public awareness initiatives and frequently engages the judiciary as critical stakeholders.

“This is expected to further assist the Corporation in achieving its mandate as a deposit insurer in line with the Core Principles for deposit insurers as set out by the International Association of Deposit Insurers,” she noted.

In his welcome address, the Administrator of NJI, Salisu Abdullahi, charged judicial officers with understanding the technicalities of financial laws.

“It is imperative for judicial officers to comprehend not only the technicalities of financial laws but also their far-reaching implications on economic stability. Hence, in addition to providing an avenue for judicial officers, financial regulators, and stakeholders to critically engage with key issues surrounding deposit insurance, this seminar also offers a platform for discourse on global best practices, legal precedents, and policy directions, which will enhance adjudicatory efficiency and contribute to the overall confidence and security of Nigeria’s financial system.

“Moreover, the Nigerian banking sector continues to evolve in response to technological disruptions and financial innovations. Digital banking, cryptocurrency, and decentralised finance have introduced new dimensions to financial transactions, prompting regulators to adapt swiftly. These developments necessitate a judiciary that is forward-thinking and adaptable to emerging financial realities.”

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