A Federal High Court in Abuja has directed the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) to appear before it and justify their decision to revoke the operating licences of two mortgage institutions.
Justice Emeka Nwite yesterday ordered the regulatory bodies to show cause why they should not be prevented from proceeding with actions against Aso Savings and Loans Plc and Union Homes Savings and Loans Plc.
The directive followed an ex parte application brought by the affected institutions through their legal representative, Joseph Silas.
While Justice Nwite declined to immediately restrain the respondents from further action, he determined that the regulators must be formally notified of the legal challenge.
“Having reviewed the counsel’s submissions, the affidavit evidence, exhibits and written address, I believe justice requires that the defendants be notified,” the judge stated.
“The defendants are hereby ordered to appear and demonstrate why the requested reliefs should not be granted.”
The court has scheduled January 5, 2026, for the CBN and NDIC to present their defence.
The applicants—Aso Savings, Union Homes, and shareholders Ridhwan Hamza and Ismaila Adamu—had requested two primary orders: a halt to enforcement of the licence revocation and prevention of any takeover actions pending full hearing of the case.
Legal Arguments
Silas contended that the CBN failed to follow mandatory procedures before revoking the institutions’ licences. He further argued that the NDIC prematurely initiated takeover proceedings without allowing the banks to exhaust their legal remedies.
The counsel warned that without judicial intervention, the regulators would implement irreversible decisions against his clients.
In a supporting affidavit, Hamza, an Aso Savings shareholder, acknowledged the institutions faced operational challenges known to the CBN. However, he claimed the regulator issued an ultimatum rather than providing support, demanding Aso Savings meet minimum capital requirements through share reconstruction by August 31, 2025.
Grounds for Revocation
According to Hamza’s affidavit, despite positive updates provided to the CBN on December 16, 2025, the regulator announced the licence revocations in a press release, citing provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020 and its Revised Guidelines for Mortgage Banks.
The CBN based its decision on several factors: failure to meet minimum paid-up capital requirements, insufficient assets to cover liabilities, critically low capital adequacy ratios below prudential thresholds, and non-compliance with multiple regulatory directives.
Hamza maintained that Aso Savings had successfully implemented measures to meet capital requirements and that the CBN was fully informed of this progress.
Allegations of Procedural Violations
The applicants’ counsel argued that the CBN violated Section 34(4) of BOFIA 2020 by failing to act in the public interest when issuing the revocation notice. He characterized the action as arbitrary and hasty, claiming it contradicted national development goals including economic growth, employment generation, and investment promotion.
Hamza also alleged that the NDIC had already begun contacting Aso Savings customers, requesting them to complete online claims forms, despite legal provisions granting the institutions 30 days to challenge regulatory decisions.
“The second respondent’s actions aim to eliminate our right to contest the first respondent’s decision by immediately commencing liquidation proceedings,” Hamza stated in his affidavit.
“The applicants have constitutional rights to fair hearing and to challenge the respondents’ actions.”
The case highlights tensions between regulatory enforcement and procedural safeguards in Nigeria’s financial sector, with the affected institutions arguing for their right to due process before final closure.
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