It gives me a great pleasure to address such a gathering of distinguished legal practitioners. I am sincerely grateful to our Solicitors here present and our facilitators for finding time out of your tight schedules to attend this sensitization Seminar on the challenges of Deposit Insurance Laws and practice in Nigeria.
The Nigeria Deposit Insurance Corporation (NDIC) was one of the financial safety net players established by Decree No. 22 of 1988, now the NDIC Act, 2006 to operate the Deposit Insurance Scheme in Nigeria. A Deposit Insurance Scheme is a financial guarantee to protect depositors in the event of a bank failure and also to offer a measure of safety for the banking system. A proper financial safety net is necessary to reduce the risk of severe financial crises. Without an appropriate financial safety net, even simple rumours of problems regarding solvency or liquidity of a financial institution have the potential to become self-fulfilling and turning into a full-blown financial crisis. With an appropriate financial safety net in place, depositor confidence tends to be greater and the likelihood of financial crises is reduced to the barest minimum. NDIC was set up as a risk minimiser and its mandates go beyond operating a ‘pay box’ institution in the Nigerian financial system. The statutory mandates of NDIC include: deposit guarantee, banking supervision, bank failure resolution and bank liquidation.
In more than twenty years of making giant strides towards ensuring that Nigeria develops a formidable Deposit Insurance System in Nigeria, NDIC was faced with numerous challenges such as:
- The problems of excessive litigations which make it difficult for the Corporation to wind up failed banks and settle depositors and other creditors within a reasonable time.
- Execution of court judgements against the assets of the Corporation as the liquidator of failed banks based on the misunderstanding of the role of NDIC as Liquidator
- Lack of proper understanding of the distinction in the legal status of NDIC as Liquidator/Deposit Insurer by legal practitioners, the court and the public at large.
- Difficulty on the part of the Corporation in recovering debts owed to failed banks due to inability to trace the debtors, lack of collateral and other related challenges.
We recognize that the Corporation cannot achieve much in addressing the Legal challenges without the full understanding by our solicitors of the issues involved. This seminar is one of the steps being taken by the Corporation to sensitize the Lawyers handling cases for the Corporation to enable us put heads together to address the challenges because as legal practitioners you have important roles to play in ensuring that the mandates of the Corporation are discharged efficiently and effectively.
It may interest you to note that similar sensitization Seminars had already been held with focus on the bench. The 1st batch of the sensitization Seminar was held in collaboration with the National Judicial Institute in June 2012 which brought together Judges of the Federal High Court as well as state High Courts. The second batch was held in March 2013 in collaboration with the Federal High Court where all the Judges of the Federal High Court participated. We consider this segment of the seminar which is focussing on the bar, particularly Legal Practitioners with ongoing relationship with NDIC as important as the previous seminars.
Finally I urge all the participants and the resource persons to give their best in addressing the various topics listed for discussion. The success of the Seminar will no doubt, depend on the constructive contributions of all. It is my hope that you will find the Seminar worthwhile and beneficial to your practice.
Thank you for your kind attention.