NDIC seeks judicial cooperation to ease the failed banks litigation challenge, warning ex-staff lawsuits could derail its liquidation mandate

The Nigerian Deposit Insurance Corporation (NDIC) has raised alarm over the failed banks litigation challenge posed by former employees, saying it could derail its statutory role in liquidating defunct financial institutions.

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Acting Managing Director and Chief Executive of NDIC, Emily Osuji, made this known on Thursday during a sensitisation seminar held in Lagos for judges of the National Industrial Court and members of the Investment and Securities Tribunal.

The event, jointly organised with the National Judicial Institute (NJI), aimed to deepen judicial understanding of deposit insurance matters and reinforce cooperation between the NDIC and the courts.

According to Osuji, lawsuits filed by ex-bank staff over unpaid salaries, severance packages, and other entitlements must be weighed carefully within the legal framework established by the NDIC Act, 2023.

“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,” she said.

She warned that judgments awarded against the NDIC and enforced through its assets risk compromising its operations.

“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,” Osuji added.

Employment cases by former bank staff present a significant challenge to our liquidation mandate.

Although the Corporation has recorded recent successes — notably the orderly closure of Heritage Bank — Osuji noted that protracted litigations remain a stumbling block to its overall mandate.

She also highlighted efforts made by NDIC to raise public awareness, improve legal clarity, and engage with the judiciary as a key partner.

“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 explained.

In his welcome address, the Administrator of the NJI, Salisu Abdullahi, tasked judges to develop stronger financial law expertise.

“It is imperative for judicial officers to comprehend not only the technicalities of financial laws but also their far-reaching implications on economic stability,” Abdullahi said.

He added that the evolving Nigerian banking system, shaped by digital innovation, cryptocurrency, and decentralised finance, required the judiciary to remain proactive and adaptable.

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The seminar, he noted, was designed to foster a deeper appreciation of international best practices, case precedents, and regulatory shifts shaping financial litigation today.