Ex-Bank Staff Lawsuits Stall Liquidation – NDIC

The Nigerian Deposit Insurance Corporation (NDIC) has raised concerns that legal actions
by former bank employees are hindering its ability to effectively liquidate failed banks.
Acting Managing Director/Chief Executive, Emily Osuji, made this known on Thursday at a
sensitisation seminar in Lagos for judges of the National Industrial Court and members of the
Investment and Securities Tribunal.
The seminar, organised in collaboration with the National Judicial Institute, was aimed at
fostering stronger cooperation among stakeholders.
Osuji highlighted the importance of handling cases related to unpaid salaries, severance
benefits, and other entitlements of ex-staff with caution to avoid disrupting the liquidation
process.
She called on judges of the National Industrial Court to strictly follow the payment hierarchy
outlined in the NDIC Act, 2023, when handling cases involving failed banks.
Matters involving severance pay, outstanding salary arrears, and exit benefits for former
employees of liquidated banks require careful handling,” she said. “It is essential for judges
to reconsider the order of claims as defined by the NDIC Act, 2023, to uphold the legal
framework governing the liquidation process.
She added that employment-related lawsuits filed by ex-staff of failed banks particularly
those before the National Industrial Court continue to pose a major obstacle to the NDIC’s
mandate of winding up failed banks efficiently.
“This issue becomes even more pressing when judgments obtained by former bank
employees are enforced against the Corporation’s assets,” she stated.
Osuji acknowledged that despite notable achievements such as the smooth and efficient
resolution of Heritage Bank ongoing litigations and court decisions stemming from former
staff continue to undermine the NDIC’s core mandate.
To address these challenges, she said the Corporation has intensified public sensitisation
efforts and strengthened its engagement with the judiciary, recognising them as key
stakeholders.
“These initiatives are designed to enhance the Corporation’s ability to fulfill its responsibilities
as a deposit insurer, in line with the Core Principles established by the International
Association of Deposit Insurers,” she added.