Depositors to Receive Up to N5 Million as NDIC Liquidates Heritage Bank

The Nigerian Deposit Insurance Commission (NDIC) has initiated the liquidation of the failed Heritage Bank, beginning with the verification and payment of its depositors.

The NDIC announced this on Monday, following its appointment as liquidator by the Central Bank of Nigeria (CBN), which revoked Heritage Bank’s license.

In a statement signed by the Acting Director of Corporate Communication, Sidi Ali, the CBN explained, “This action has become necessary due to the bank’s breach of Section 12 (1) of BOFIA, 2020. The board and management of the bank have not been able to improve the bank’s financial performance, a situation which constitutes a threat to financial stability. Despite various supervisory steps prescribed by the CBN to stem the decline, the bank has continued to suffer, with no reasonable prospects of recovery, making the revocation of the license the necessary step.”

As liquidator, the NDIC issued a statement signed by the Director of Communication & Public Affairs, Bashir Nuhu, stating that depositors would receive up to N5 million each. Depositors with alternate bank accounts will be paid up to the insured amount using their Bank Verification Number to locate their alternate account. Those with deposits exceeding N5 million will receive liquidation dividends once the bank’s assets are realized and debts recovered.

“Depositors without alternate bank accounts should visit the nearest branch of the defunct bank with proof of account ownership, identification, alternate account details, and Bank Verification Number for verification and payment. Alternatively, they can file an online claim on the NDIC website,” the NDIC statement read.

The NDIC also urged the bank’s creditors to file their claims at the nearest branch or via the online platform. Creditors will be paid after depositors, while debtors are advised to complete their loan repayments.

“The NDIC assures the banking public of its commitment to the safety of depositors’ funds in all licensed banks. Depositors should continue their banking activities without fear, as banks with valid licenses remain safe and sound,” the NDIC concluded.

The Bank Customers Association of Nigeria has expressed support for the CBN’s decision. In an interview with The PUNCH, the Association’s President, Dr. Uju Ogubunka, stated that the CBN’s action was necessary to maintain banking sector stability.

Ogubunka explained, “The CBN would have considered all implications before taking action. If a bank jeopardizes the system, authorities must act. If a bank is irredeemable, the CBN has no choice but to revoke its license.”

Professor of Capital Market, Uche Uwaleke, also supported the move, noting that it was in the interest of financial system stability. He emphasized the importance of protecting depositors and employees during the liquidation process.

Additionally, the House of Representatives has pledged to engage relevant stakeholders to ensure the safety of depositors’ funds. Spokesman Akin Rotimi stated that the House is committed to oversight functions to prevent negative impacts on Nigerians. The House Committees on Banking Regulations and Insurance will examine the circumstances and subsequent steps taken by the NDIC to safeguard depositors’ interests and maintain financial stability.

The Chairman of the House Committee on Banking Regulations, Mohammed El-Rufai, and the Chairman of the Committee on Insurance and Actuarial Matters, Ahmed Jaha, assured diligent oversight to ensure transparency, accountability, and the protection of depositors’ funds.