A high-stakes legal showdown is unfolding in Abuja as Nigeria’s top financial regulators move to shut the door on a court challenge brought by two distressed mortgage banks. The Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) have asked the Federal High Court to step aside, arguing that it lacks the authority to hear a suit filed by Aso Savings & Loans Plc and Union Homes Savings & Loans Plc over the withdrawal of their operating licences.
At proceedings before Justice Emeka Nwite on Monday, lawyers for both regulators raised preliminary objections, insisting that the issue before the court is not the merits of the licence revocations but whether the court has jurisdiction to entertain the matter at all. Their stance effectively places a legal roadblock in front of the mortgage banks’ attempt to halt liquidation processes already set in motion.
For the CBN, the argument was blunt. Its counsel described jurisdiction as the “lifeline” of any case, stressing that the court must first decide whether it has the power to act before considering any request to restrain the regulators. Relying on a Supreme Court precedent, the CBN urged the court to resolve the jurisdictional question as a priority.
The NDIC echoed that position, telling the court it was merely carrying out its statutory duty following the licence withdrawals. Its lawyer argued that once a banking licence is revoked, the law empowers the NDIC to step in swiftly to protect depositors and preserve remaining assets, leaving little room for delay.
On the other side, the mortgage banks painted a very different picture. Their counsel argued that although the CBN revoked the licences, the law allows affected institutions a 30-day window to challenge such decisions. According to them, pushing ahead with liquidation during this period could cause irreversible harm, especially if the court later finds the regulator’s action unlawful. They urged the court to freeze all further steps and maintain the status quo until the case is fully determined.
Justice Nwite, however, appeared cautious about granting any relief while the question of jurisdiction remains unresolved. He noted that proceeding to issue restraining orders before deciding whether the court can hear the case would amount to an “exercise in futility.” The judge consequently adjourned the matter to January 21, when arguments on the regulators’ preliminary objections will be heard.
The dispute stems from the CBN’s decision in December 2025 to revoke the licences of Aso Savings and Union Homes, citing persistent breaches of regulatory requirements, weak capital positions, and an inability to cover liabilities with available assets. The action triggered NDIC’s intervention and sparked concerns among shareholders over due process and the speed of liquidation.
As the legal battle shifts to the threshold question of jurisdiction, the case is shaping up to be a defining test of regulatory authority in Nigeria’s financial sector. Beyond the fate of the two mortgage banks, the outcome could set an important precedent on how far courts can go in reviewing licence revocations—and how quickly regulators can move when they say depositors’ funds are at risk.
