The Nigeria Deposit Insurance Corporation (NDIC) has commenced asset recovery process of liquidated Heritage Bank following the revocation of its license by the Central Bank of Nigeria (CBN) on June 3, 2024.
Speaking at a two day workshop organized by the NDIC for Business and Financial Editors in Lagos on Thursday and Friday, the CEO and Managing Director of the Commission Mr. Bello Hassan while speaking at the event, announced that it has taken significant steps to ensure depositors funds are paid.
He disclosed that the commission has successfully reimbursed 84.98% of insured depositors’ funds so far. He explained that following the Central Bank of Nigeria’s (CBN) revocation of Heritage Bank’s license, the NDIC was appointed as the liquidator, responsible for managing the resolution of the bank’s affairs and within four days of its closure, the commission commenced payments to depositors, ensuring that those with insured deposits of up to ₦5 million received their funds promptly.
“Utilizing Bank Verification Numbers (BVNs), the NDIC streamlined the reimbursement process, allowing for efficient identification of depositors’ accounts without requiring them to visit NDIC offices. This rapid response has been crucial in mitigating the financial impact on depositors during a challenging economic climate.
“Having largely reimbursed depositors their insured deposits, the Corporation is committed to ensuring that depositors with balances exceeding N5 million are also paid the balance of their deposits. These uninsured deposits represent a significant portion of the total deposits in Heritage Bank.
‘’In this regard, the Corporation is already working assiduously to ensure that, all depositors with amounts in excess of the maximum insured amount of N5 million are paid through liquidation dividends from the realization of the defunct bank’s assets and recovery of debts.’’
Mr. Hassan Bello also disclosed that the prompt payment of depositors is coming at a time when the Corporation had recently increased the deposit insurance coverage from N500,000 to N5 million, significantly cushioning the negative impact of the bank’’s failure, despite the current challenging economic climate.
This achievement he explained is consistent with the provisions of the International Association of Deposit Insurers (IADI) Core Principle 15, which emphasizes timely payouts to depositors of failed bank.’
As part of its ongoing efforts, the NDIC has also initiated the recovery of Heritage Bank’s assets. This process includes the recovery of outstanding debts and the realization of the bank’s investments and physical assets.
“Over the years, the NDIC has been instrumental in promoting stability by ensuring that when banks fail, depositors are protected, and their funds are reimbursed promptly.
“Confidence is key in the maintenance of financial system stability and the role of deposit insurance cannot be overemphasized. As one of the safety-nets, it reassures depositors, thereby instilling trust in the banking system and prevents bank runs during times of uncertainty.’’ He explained.
