The Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) has challenged the jurisdiction of the Federal High Court in Abuja to hear a suit filed by Aso Savings and Loans Plc and Union Homes Savings and Loans Plc over the revocation of their operating licences.
CBN’s lawyer, Onyeka Ezeah, and NDIC’s lawyer, Abubakar Shehu, raised an objection before Judge Emeka Nwite, during Monday’s hearing.
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Aso Savings and Loans Plc and Union Homes Savings and Loans Plc are both Nigerian primary mortgage institutions licensed to provide mortgage financing and related banking services.
The filed the suit along with two other co-plaintiffs – Ridhwan Hamza and Ismaila Adamu – to challenge the revocation of their operating licences.
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PREMIUM TIMES reported that the CBN revoked the licences of the two mortgage banks on 16 December 2025, citing undercapitalisation, failure to meet minimum paid-up share capital, insufficient assets, and non-compliance with regulatory directives.
However, in an ex parte application filed on 23 December, the plaintiffs sought orders restraining the defendants from taking further steps on the licence revocation pending the hearing of the motion on notice.
They also requested that the court bar the defendants from enforcing the decision pending the determination of the motion.
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The mortgage bank’s lawyer moved the application on 29 December 2025, but the judge, Mr Nwite, refused to grant it.
He held that the interest of justice would be better served by putting the defendants on notice to show cause why the prayers should not be granted.
He adjourned the matter until 5 January for the defendants to respond.
CBN, NDIC challenge court jurisdiction
At the start of Monday’s proceedings, the plaintiffs’ lawyer, Joseph Silas, was met with the defendants’ resistance when he called for the hearing of the motion to show cause.
He argued that the law allowed the plaintiffs to challenge the revocation of his clients’ licenses within 30 days of the decision. He argued that the NDIC should be restrained from liquidating the two mortgage institutions pending the hearing and determination of the substantive suit.
Mr Silas said if the NDIC was allowed to proceed with liquidation and the court later found that the CBN acted unlawfully, the plaintiffs would be prejudiced. He therefore asked the court to order the parties to maintain the status quo.
But the CBN’s lawyer, Ms Ezeah, opposed the application, arguing that the issue of jurisdiction must first be resolved. “We have a matter of jurisdiction here,” she said. Describing jurisdiction as the lifeblood of a case, she cited a 2022 Supreme Court decision in Waziri v PDP, which held that jurisdictional issues must be determined before any other matter.
Similarly, NDIC’s lawyer, Mr Shehu, aligned with Ms Ezeah’s submission. He said the NDIC was acting within its statutory powers and had also filed a preliminary objection. “What should be done now is to adjourn for a date to allow the plaintiffs to respond so that our applications can be heard,” he said.
In response, Mr Silas said the NDIC was continuing with the liquidation process while the case was pending. “All we are asking for is for parties to stay in action,” he said, citing the Savannah Bank case.
But Mr Shehu told the court that once the licence of a financial institution is revoked, the NDIC is empowered by law to take over in the interest of depositors.
Mr Silas maintained that the law gave the plaintiffs 30 days to challenge the CBN’s decision and that the NDIC was acting solely on the apex bank’s directive.
He said the application was also in the interest of depositors, noting that NDIC insurance covered only up to N2 million per depositor, regardless of the amount deposited. The plaintiffs’ lawyer added that NDIC’s intervention became necessary because depositors could no longer access their funds. He also said that if the plaintiffs eventually succeeded, their shareholders could seek damages.
Judge Nwite asked Mr Silas whether it would be fair to make any order when the defendants had filed preliminary objections challenging the court’s jurisdiction, and Mr Silas replied that the aim was to preserve the res (the subject matter of the case).
Following Mr Silas’s response, the judge said he was being careful not to embark on an exercise in futility. He described jurisdiction as a threshold issue and adjourned the matter until 21 January to hear the preliminary objections.
The matter
The CBN, through its spokesperson, Hakama Ali, had announced that the revocation of the licences followed violations of the Bank and Other Financial Institutions Act (BOFIA) 2020 and the Revised Guidelines for Mortgage Banks.
The regulator said the affected institutions failed to meet the minimum paid-up share capital for their licence category, had insufficient assets to cover liabilities, were critically undercapitalised with a capital adequacy ratio below the prudential minimum, and failed to comply with several directives from the CBN.
However, in a four-ground argument contained in the plaintiffs’ ex parte motion seeking an urgent court reprieve, their lawyer, Mr Silas, contended that the CBN failed to comply with conditions precedent before revoking the licences. He said the NDIC moved to take over the institutions without allowing them to exhaust their legal remedies.
One of the co-plaintiffs, Ridhwan Hamza, who is an Aso Savings shareholder, acknowledged in a supporting affidavit that the institutions had operational challenges known to the CBN. He said the CBN gave Aso Savings an ultimatum to meet its minimum capital requirement by 31 August 2025.
However, Mr Hamza said Aso Savings made positive updates communicated to the CBN. But despite the development, CBN chose to rely on provisions of the Banks and Other Financial Institutions Act, 2020, and its revised guidelines to revoke the licences.
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He listed the CBN’s reasons, including failure to meet capital requirements, insufficient assets, undercapitalisation, and non-compliance with regulatory directives.
Mr Hamza also argued that the CBN acted arbitrarily and against public interest. He also said the NDIC’s actions were aimed at extinguishing the plaintiffs’ right to challenge the revocation. He concluded that granting the application would not prejudice the defendants and would serve the interest of justice.
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