The Chief Judge of the Federal High Court, Justice Ibrahim Auta, has urged the Nigeria Deposit Insurance Corporation, NDIC, to impose stiffer sanctions against operators of illegal financial institutions known as 'Wonder Banks' in the country.
Speaking at a sensitization seminar organised for Federal High Court judges by the NDIC in Abuja, weekend, Justice Auta said it was regrettable that Nigerians have continued to fall prey to "unhealthy activities" of such uninsured banks.
The Chief Judge implored members of the 8th National Assembly to promptly amend the extant laws that established the NDIC, stressing that when eventually passed into law, the revised NDIC Act will complement the judiciary in the rationalization of the Deposit Insurance Jurisprudence.
He said: "Additionally, it is time for your corporation to initiate/recommend penal or alternative prescriptions necessary to curb the inherent vulnerability of ordinary Nigerians to unhealthy activities of Non-Banks (Uninsured Banks/Institutions) sometimes called 'Wonder Banks'."
NDIC not only panacea for resolving bank failures
Meantime, while acknowledging the efforts of the corporation over the years to ensure the implementation of a robust deposit insurance system that is fully supported by both the banking community and government, Justice Auta maintained that the NDIC could not be the only panacea for resolving all bank failures or all other issues in the financial system.
He said: "As I understand it, the NDIC activities mirror the apparent concern government has about the implications for costly bank runs, the plight of depositors whenever a bank fails and the recognition of the importance of transparency in government actions.
"It must be made clear that deposit insurance or NDIC cannot be the only panacea for resolving all bank failures or all other issues in the financial system, as it is only one of the critical partners or components of the financial safety net arrangment responsible for promotion of financial stability.
"The success of the NDIC in the discharge of its mandates would therefore, to a large extent, be enhanced if other safety net players and stakeholders which include the judiciary would effectively play their respective roles.
"Other considerations critical to the role of NDIC include macro-economic stability, soundness of the financial system, hugh threshold of supervision and regulations, robustness of the legal framework and the structure of the banking system.
"I am particularly pleased that NDIC has recognised the judiciary as an important stakeholder which has a c ritical role to play in maintenance of financial system stability, which informed the initiation if the annual sensitization seminar for the Federal High Court.
"As you are all aware, our unique court is constitutionally reposed with exclusive jurisdiction respecting the NDIC activities. We are, therefore, integral and certainly indispensable to the holistic implementation, realisation and accomplishment of the NDIC mandates as provided in the NDIC enabling Act.
"This brings to the fore the strategic importance of the sustenance of this annual sensitization seminar for judiciary in general and the Federal High Court in particular viewing the technical and dynamic nature of the banking operations and financial matters.
"It is gratifying to learn from the reports reaching me since the commencement of this sensitization seminars about three years ago that the objectives of the programme is being achieved, as judges are now better informed not merely on NDIC mandated and operations, but on the dynamics of the financial services industry and indeed the economy as a whole.
"This means, judges are now better positioned and prepared to deal with complex financial disputes and indeed developing core competencies in banking matters, which also leads to quicker disposal of cases."
Challenges confronting NDIC
In his keynote address, Managing Director of the NDIC, Alhaji Umaru Ibrahim, argued that one of the major challenges confronting the corporation in the discharge of its mandate is public awareness.
He said: "We have observed with concern that most of the Nigerian publics have a misconceived perception of the corporation and its statutory mandate. In order to curb this situation, we have invested time and valuable resources in ensuring that the Nigerian public is properly informed in line with our Strategic Plan 2011-2015.
"This third run of the sensitization seminar on the 'Challenges to Deposit Insurance Law and Practice in Nigeria', is a concerted attempt by the Corporation to consolidate on the gains recorded previously and also strengthen its relationship with the court in the interest of bank depositors and the Nigerian financial system as a whole", Umaru added.
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