The liquidation of Heritage Bank Plc and the transfer of its powers to the Nigeria Deposit Insurance Corporation (NDIC) under the NDIC Act 2023 have significant implications for debt recovery. The NDIC is empowered to recover debts owed to the bank using measures such as naming and shaming debtors, appointing receivers, and leveraging the Global Standing Instruction (GSI) Scheme. These provisions allow the NDIC to trace and seize debtor funds across other banks, extending to both individual and corporate accounts. Moreover, the NDIC has the authority to initiate winding-up proceedings against non-compliant debtors to recover outstanding obligations efficiently.
The NDIC can also void certain security interests and antecedent transactions that were fraudulently or preferentially conducted before the liquidation. This includes invalidating transfers intended to shield assets from creditors. The powers granted to the NDIC under the NDIC Act 2023 exceed those under the general framework of the Companies and Allied Matters Act (CAMA), enabling it to enforce contracts and recover assets effectively. These measures align with broader regulatory efforts to enhance credit repayment culture and minimize the risk of financial loss to depositors.
Furthermore, the NDIC can repudiate burdensome contracts to facilitate orderly liquidation. This power includes overriding ipso facto clauses, which typically allow contract termination upon insolvency. While aggrieved parties can claim damages for losses due to contract repudiation, such claims are limited to actual damages. Collectively, these provisions underscore the NDIC’s enhanced role in managing failed banks and recovering their assets, ensuring better protection for creditors and depositors in Nigeria’s financial system.
