CBN, NDIC ask Court to decline jurisdiction in suit challenging revoked Mortgage Bank licences

The Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) have requested the Federal High Court in Abuja to decline jurisdiction in a suit filed by Aso Savings & Loans Plc and Union Homes Savings & Loans Plc, which is challenging the revocation of their operating licences.

The matter was heard on Monday before Justice Emeka Nwite, where both regulators raised preliminary objections, arguing that the court lacks the authority to entertain the case.

Counsel to the CBN, Onyeka Ezeah, emphasized that jurisdiction is “the lifeline of a case” and must be resolved before any substantive application can be considered. She cited a 2022 Supreme Court ruling to support the principle that questions of jurisdiction take precedence.

Similarly, NDIC’s lawyer, Abubakar Shehu, maintained that the corporation was acting strictly within its statutory mandate, adding that the NDIC had already filed preliminary objections and a counter-affidavit, making the matter ready for judicial consideration.

Representing the two mortgage banks, Joseph Silas told the court that the matter was scheduled for the defendants to “show cause” why they should not be restrained from taking further action.

He argued that while the CBN revoked the licences in December 2025, the affected institutions are entitled under the law to a 30-day window to challenge the decision, during which liquidation steps by the NDIC should be suspended.

Silas warned that allowing NDIC to proceed with liquidation could irreversibly prejudice the plaintiffs if the court later rules that the CBN’s revocation was unlawful. He urged the court to maintain the status quo pending the determination of the substantive suit.

However, both regulators opposed the request, asserting that the NDIC is empowered to take over institutions whose licences have been revoked, primarily to protect depositors who can no longer access their funds.

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Justice Nwite questioned whether it would be proper to grant any restraining order while preliminary objections challenging the court’s jurisdiction remain unresolved.

Describing jurisdiction as a threshold issue, the judge said he would avoid embarking on an “exercise in futility” and adjourned the matter to January 21 for hearing of the defendants’ preliminary objections.

The suit was filed by Aso Savings, Union Homes, and two shareholders after the CBN revoked the institutions’ licences, citing failure to meet minimum capital requirements, insufficient assets to cover liabilities, undercapitalisation, 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 acted prematurely by commencing liquidation, undermining their right to challenge the regulator’s decision.

The CBN, on the other hand, stated that the revocations were necessary due to persistent regulatory infractions and deteriorating financial conditions at the two mortgage banks, and that the actions were taken in line with Section 12 of BOFIA 2020 and Section 7.3 of the Revised Guidelines for Mortgage Banks in Nigeria.