Corporation (NDIC) have asked the Federal High Court in Abuja to decline jurisdiction in a suit filed by Aso Savings & Loans Plc and Union Homes Savings & Loans Plc challenging the revocation of their operating licences.
This is according to proceedings at the Federal High Court
on Monday, where both regulators raised preliminary objections before Justice
Emeka Nwite.
The legal dispute follows the CBN’s recent withdrawal of the
mortgage banks’ licences, a move that has triggered liquidation steps by
the NDIC and raised concerns over depositor protection and regulatory due
process.
Counsel to the CBN, Onyeka Ezeah, and NDIC’s
lawyer, Abubakar Shehu, told the court that the suit
cannot proceed because the court lacks jurisdiction to
entertain the matter.
Ezeah described jurisdiction as “the lifeline of a case,” arguing that it must be
resolved before the court considers any substantive applications.
She cited a 2022 Supreme Court decision to support the
position that jurisdictional issues take precedence.
Shehu aligned with the CBN’s argument, insisting that the
NDIC was acting strictly within its statutory mandate. He added that the
corporation had already filed a preliminary objection and counter-affidavit,
making the matter ripe for hearing.
Counsel to Aso Savings and Union Homes, Joseph
Silas, told the court that the matter was scheduled for the defendants
to “show cause” why the court should not restrain them
from taking further action.
He argued that although the CBN revoked the licences,
the affected institutions are entitled under the law to a 30-day window to
challenge the decision, during which liquidation steps should be suspended.
According to Silas, allowing the NDIC
to proceed with liquidation could irreversibly prejudice the
plaintiffs if the court later finds the CBN’s action unlawful.
He urged the court to order parties to maintain the status
quo pending the determination of the substantive suit.
However, both regulators opposed the
request, maintaining that the NDIC is empowered to take over once a
financial institution’s licence is revoked, primarily to protect
depositors who can no longer access their funds.
Justice Nwite questioned whether it would be
proper to grant any restraining order while preliminary objections challenging
the court’s jurisdiction were pending.
Describing jurisdiction as a threshold issue, the
judge said he would avoid embarking on an “exercise in futility” and
adjourned the matter until January 21 for hearing of the
defendants’ preliminary objections.
Aso Savings, Union Homes, and two shareholders filed
the suit after the CBN revoked the institutions’ licences in
December 2025, citing failure to meet minimum capital requirements,
insufficient assets to cover liabilities, undercapitalization, and
non-compliance with regulatory directives.
In court filings, the plaintiffs argued that the
CBN failed to follow due process under the Banks and Other Financial
Institutions Act (BOFIA) 2020 and that the NDIC moved too quickly
to commence liquidation, thereby undermining their right to challenge
the regulator’s decision.
The CBN had cited persistent regulatory
infractions and deteriorating financial conditions at the two primary mortgage
banks as reasons for its action.
It added that the decision was taken in line with
Section 12 of the Banks and Other Financial Institutions Act (BOFIA) 2020 and
Section 7.3 of the Revised Guidelines for Mortgage Banks in Nigeria.
0 Comments