NDIC MD

PROTOCOLS:
 The Chief Judge of Federal High Court, Honourable Justice John T.Tsoho, OFR
 The Administrator of National Judicial Institute, Honourable Justice
Salisu Garba Abdullahi
 All the Judges of the Federal High Court here present
 The Senior Executives of NDIC
 The Learned Senior Advocates of Nigeria and other invited Speakers
 Invited Guests
 Ladies and Gentlemen

1. My Lords, distinguished guests, gentlemen at the bar, it is with great pleasure and honour that I welcome you all, to this year’s Sensitization Seminar for Judges of the Federal High Court. The theme of this year’s Seminar which coincidentally is the same theme for a similar program held a few days ago, for the Justices of Court of Appeal is ‘’Building Strong Depositor Confidence in Banks and Other Financial Institutions through Adjudication of Disputes’’. This theme was deliberately chosen 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

2. We note with a great sense of fulfillment, that this seminar is being organized annually for Judges of the Federal High Court, the last one was successfully held at Ibom Resort Uyo in Akwa-Ibom State on 19th October 2023. This is for the obvious reason that Federal High Court is the Court of first instance we resort to, and a great number of cases involving the Corporation are before your Lordships.

3. My Lords, as I welcome you all to this year’s seminar, please permit me to reiterate a fact we all know that banking is a commercial venture.
But, it is a business venture with a difference. Banks primarily operate with depositors’ funds rather than the funds of the business owners.
Considering the inherent risk associated with banking and the need to ensure the safety of depositors funds, banks are generally regulated and supervised. In addition to the surveillance, depositors are further provided with protection by way of deposit guarantee scheme. This scheme provides seamless and continuous access by depositors of their funds upon license revocation. Deposit Insurance therefore, becomes a critical component of safety-net arrangement put in place to ensure the protection of depositors.

4. The mandates of the Corporation are: Deposit Guarantee, Bank Supervision, Failure Resolution and Liquidation. Our public Policy Objectives are to enhance confidence in the financial system and contribute to financial system stability through the protection of depositors. In discharging these mandates, especially resolution of banking distress and liquidation of failed banks, some complex legal issues bordering on rights of creditors, shareholders and depositors of such failed institutions may be brought before your lordships for determination of the rights of the parties. It is our belief that a proper understanding of the concept and practice of deposit insurance, would enable my Lords to appreciate the legal issues involved where there are disputes, and to deal with the cases expeditiously. We therefore sincerely believe that, your pronouncements on these issues will invariably set judicial precedents thereby contributing to the development of bank insolvency law and practice in Nigeria, which is an evolving area of legal jurisprudence.

5. We are conscious of the fact that no matter how robust the existing legal framework is, the need for collaboration can never be overemphasized, bearing in mind the role of the judiciary who has been vested with powers under the Constitution of the Federal Republic of Nigeria to interpret laws and adjudicate on matters. In the same vein, we recognize the fact that the effectiveness of the Deposit Insurance System (DIS) requires a deep understanding of the unique roles of the Corporation in our financial eco-system. This sensitization seminar is therefore, one of the initiatives of the Corporation to engage the judiciary as an important arm of Government towards achieving its mandate.

6. Although my duty at this moment is to welcome my Lordships and all
participants to this program, please permit me to thank most sincerely
My Lord, the Chief Judge, and all the Judges of the Federal High Court
here present, for finding time out of your busy schedule to attend this seminar. It is an eloquent testimony of the desire of the Judiciary to ensure a safe and sound banking for the nation. I am glad to mention here few instances of benefits derived from organizing the program over of the year namely

a. The challenge of liquidation-related litigations experienced in the past which makes it difficult for the Corporation to wind-up banks whose licenses had been revoked by the Central Bank of Nigeria, and to settle depositors and other claimants promptly has
drastically reduced.
b. As at date, the Corporation had obtained Winding up Orders for 96 out of 183 Micro Finance and Primary Mortgage Banks whose
licenses were revoked by the CBN in May 2023, in less than one year of revocation.
c. There is better understanding of the roles of the Corporation as a corporate body and Deposit Insurer, as distinct from NDIC
acting as Liquidator of failed banks whose licenses had been revoked. Consequently, the incidence of litigants that obtained
judgement against banks in liquidation and attempted to levy execution against the assets of the Corporation as a corporate
body has been substantially diminished.
d. The seminar has provided opportunity for my Lords, and paper presenters as well as paper discussants, who are mostly senior
members of the bar to brainstorm on the salient provisions of the Failed Banks (Recovery of debts and Financial Malpractices in Banks) Act 1994 as a major tool for recovery of debts owed failed banks.

7. It is worthy to also mention that, the desire of the NDIC to continuously promote depositor confidence within the Nigerian Banking system was further demonstrated by the upwards review of the maximum deposit insurance coverage levels, as approved in April 2024. The deposit insurance coverage has been raised from N500,000 to N5,000,000 for Deposit Money Banks (DMBs) and Subscribers of Mobile Money Operators (MMOs). Accordingly, the coverage for Payment Service Banks (PSBs) and Primary Mortgage Banks (PMBs) has been reviewed from N500,000 to N2,000,000 while that of Microfinance Banks (MFBs), has been increased from N200,000 to N2,000,000. It is instructive to state that, the revised coverage for the DMBs provides a full coverage for 98.98% of the total depositors and 25.37% of the total value of deposits. Similarly, the revised coverage provides a full deposit insurance cover for 99.27%, 99.34% and 99.99% of total depositors of MFBs, PMBs and PSBs, respectively.
My Lords, permit me to state at this juncture that, despite the achievements recorded so far, the Corporation will not relent in soliciting for more synergy and collaboration with the judiciary. It is on this note that we respectfully urge My Lord, the Chief Judge to assist in facilitating the speedy issuance of the Winding-Up Rules in accordance with Section 56(2) of NDIC Act 2023. This we believe, will provide for quick and effective winding up of Banks and other licensed deposit taking financial Institutions whose licenses have been revoked.

8. Finally, please permit me once again, to specifically welcome the paper presenters and the discussants, who are here present to share their thoughts on the topics. We are indeed grateful to them for honoring our invitation. It is our hope that at the end of this one-day program, we would have all learnt something towards building strong depositors
confidence in our banks and other financial institutions thereby ensuring safe and sound financial system in Nigeria.

9. On this note, I most sincerely welcome you all and wish you are warding sessions.

BELLO HASSAN, OON, FCA, FCIB
MANAGING DIRECTOR/CEO, NDIC
May 2024