FAILED BANKS (RECOVERY OF DEBTS) AND FINANCIAL MALPRACTICES IN BANKS ACT
Act · Finance
An Act establishes a special tribunal for recovering debts from failed banks and prosecuting financial malpractices. It targets debtors of failed banks, former directors and officers, and the NDIC in managing bank estates. This ensures rapid debt recovery and accountability to protect depositors.
FAILED BANKS (RECOVERY OF DEBTS) AND FINANCIAL MALPRACTICES IN BANKS ACT
What Is This Policy?
An Act establishing a special tribunal for the recovery of debts owed to failed banks and for the trial of persons accused of financial malpractice that contributed to bank failures.
Who Does It Target?
Debtors of failed banks Former directors and officers of failed banks The NDIC managing failed bank estates The Failed Banks Tribunal (now National Industrial Court handles residual cases)
What Does It Aim to Achieve?
Rapidly recover debts from failed bank debtors, hold accountable those whose financial malpractice caused bank failures, and protect depositors' funds through speedy prosecution and recovery.
Key Features
Special Tribunal: Created a specialised tribunal with expedited procedures for failed bank debt recovery and malpractice trials. Wide Jurisdiction: Covers fraudulent loans, insider abuse, and other malpractices that contributed to bank collapse. Asset Freezing: Tribunal has power to freeze assets of accused persons pending trial. Personal Liability: Directors and officers of failed banks may be held personally liable for losses caused by their malpractice.
Current Status
Rollout Stage: Active — residual cases now handled by specialised courts Coverage: Nationwide banking sector Beneficiaries: Failed bank depositors; financial system integrity Funding: Federal Government
How to Access
NDIC initiates recovery proceedings as liquidator of failed banks Former directors may defend themselves in tribunal proceedings Debtors of failed banks should contact NDIC to regularise outstanding loans Application method: Engage NDIC at https://www.ndic.gov.ng for failed bank debt matters.
Important Terms
Statute of limitations may not apply to some failed bank offences Personal liability of directors extends to wilful malpractice not ordinary business decisions EFCC may refer financial malpractice cases to appropriate courts
Official Resources
Website: https://www.ndic.gov.ng Contact: Nigeria Deposit Insurance Corporation (NDIC)
Legal Framework
Enacted under the legislative powers of the National Assembly as the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act (Cap F2 LFN 2004). Operates alongside the Banks and Other Financial Institutions Act (BOFIA) 2020, the Central Bank of Nigeria Act 2007, the Nigeria Deposit Insurance Corporation Act, and the EFCC (Establishment) Act 2004. Aligns with Basel Committee on Banking Supervision guidelines on bank resolution and debt recovery.