Section 32: Grievous violation of obligations.

(1) Whenever it appears to the Corporation that an insured institution or its directors or officers have committed a grievous violation of its obligation under this Act or have continued to conduct the business of the insured institution-
(a) in an unsound manner; or
(b) in a manner that intentionally or negligently permits any of the officers or agents of the insured institution to violate any provisions of any law or regulation to which an insured institution is subject,
the Corporation may serve on the Board of the insured institution a warning notice stating that where the unsound practice or violation continues, the name of the insured institution may be removed from the register of insured institutions.
(2) A copy of the warning notice issued under subsection (1) shall be forwarded to the Central Bank of Nigeria.
(3) It shall be deemed a grievous violation of obligation under this Act where an insured institution-
(a) persistently suffers liquidity deficiency;
(b) persistently contravenes the provisions of any legislation or regulation relating to banking, economic and financial crimes;
(c) makes incomplete or incorrect statements to the Corporation;
(d) is in default of its annual premium payment or special contribution as provided in section 23 of this Act;
(e) habitually fails to render returns to the Corporation as required under this Act or does not submit on request any other information for the efficient performance of the function of the Corporation;
(f) makes incorrect statement to the Corporation as regards customers' deposits it has insured;
(g) fails to make adequate provisions for bad and doubtfill debts up to the amount recommended by the Central Bank of Nigeria; or
(h) fails to write off bad debts as may be recommended by the Central Bank of Nigeria.
(4) Where despite being served with a warning notice under subsection (1), in the opinion of the Board, the unsound practice continues unabated, the Corporation, with the concurrence of the Central Bank of Nigeria and subject to the provisions of section 33 of this Act, may terminate the insured status of such insured institution.