A retired Judge of the Federal High Court, Hon. Justice Ibrahim Buba on Thursday charged lawyers and solicitors working for the Nigeria Deposit Insurance Corporation (NDIC) to be intentional about debt recovery and asset realisation in the event of bank failures.
His Lordship who spoke at the sensitization seminar for external solicitors of the NDIC in Lagos with the theme, “Consolidating the Collaborative Efforts in Mastering Deposit Insurance Scheme and Bank Resolution revealed “that as a judge, he had adjudicated on cases where loans were given to “ghosts” with fictitious addresses and non-existent assets as guarantees.
He urged the lawyers to do their jobs thoroughly and diligently in handling matters regarding debt recovery in case of bank failures.
The retired jurist stated that the failure of any bank has far-reaching implications on the economy of the country and the individual depositors, saying many Nigerians had invested their life savings in banks.
Explaining that bank failure is not peculiar to Nigeria, Justice Buba stated that the solicitors have a responsibility to understand the NDIC Act and the workings of the financial system.
He said, “We can’t help but lament. It is our duty when we represent NDIC, we have to understand the Act from 1988 up to the amendment in 2022. We must understand the scheme of recovery of debts and where Nigeria stands today in the comity of nations when it comes to banks and banking matters and where is our position, that is our duty.
“Bank failure is not unique to Nigeria alone, it is the world over. If you don’t keep to the rules and regulations establishing the banks, industries and you get people who were not trained or were trained by dubious people, banks will fail.
“Sometimes even when rules are adhered to strictly, banks will still fail and will continue to fail for reasons beyond human comprehension.”
He disclosed that as a judge, he once approached a bank for a N2m loan but they requested for his mother’s maiden name which he did not give hoping that his credentials as a judge would get him the loan.
He said to his dismay the loan was rejected while a case was brought to his court where someone got a N1bn loan because his father was Chairman of the Bank.
“I have adjudicated several cases where loans were given to ghosts, the addresses fictitious, they never existed. Even the C of O was from Oluwole.
“As a Nigerian lawyer, don’t begin to look at failure in the US, failure in UK, look at failure in your own system. Those systems (abroad) have a way of checking things that would undermine their institutions.”
In his keynote address, the Managing Director/Chief Executive of the NDIC, Bello Hassan who was represented by Head, Legal Department, Henry Fomah charged the solicitors “to continue your diligent efforts in assisting the Corporation with debt recovery and asset realization.”
According to him, beyond paying the insured sums to depositors from the Corporation’s deposit insurance funds (DIF), “the NDIC is as liquidator is also obligated to settle uninsured portion of deposits and all legitimate creditor claims from the realised assets of the insured institution in-liquidation.”
“I am pleased to report that the Corporation has consistently fulfilled this responsibility, a success largely attributable to our collaborative partnerships, including the invaluable contributions of our external solicitors.”
He stated that orderly liquidation of banks whose licenses have been revoked by the Central Bank of Nigeria “is a critical function in which the Corporation requires your support to efficiently discharge the mandate and maintain the stability of the financial system.”
Bello noted that the recent failure of Heritage Bank, “highlighted the intricate nature of bank liquidation and the vital role of collaboration with our external solicitors. Liquidation, by its nature, is intertwined with litigation.”
“The NDIC, in fulfilling its responsibilities, engages in legal proceedings both as plaintiff and defendant, representing the interests of depositors and creditors while also pursuing debt recovery from debtors of closed banks. The recovery of these debts and the realization of assets are crucial to achieving our corporate objectives,” he added.
Credit: The Nigeria Lawyer
