In a recent development, the Nigeria Deposit Insurance Corporation (NDIC) has announced that it has successfully disbursed 82.36% of the insured deposits from Heritage Bank, which was recently closed by the Central Bank of Nigeria (CBN). This significant progress was achieved just four days after the bank’s license was revoked due to financial instability and regulatory breaches.
The CBN revoked Heritage Bank’s license on June 3, 2024, citing ongoing financial difficulties and non-compliance with regulatory requirements as the primary reasons. This decision aligns with the CBN’s mandate under Section 12 of the Banks and Other Financial Institutions Act (BOFIA) 2020, aimed at ensuring the stability of Nigeria’s financial system.
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In response to the closure, the NDIC promptly initiated payments to the bank’s depositors, with a maximum of N5 million per depositor. The corporation utilized Bank Verification Numbers (BVN) to expedite the process, locating depositors’ accounts in other banks and disbursing the insured amounts efficiently.
NDIC Director of Communication and Public Affairs, Bashir A. Nuhu, highlighted the achievement, stating, “The Corporation began the payment of insured deposits within a record time of four days of the bank closure. This was made possible by using BVNs as unique identifiers, which allowed us to locate depositors’ alternative accounts swiftly.”
However, 17.64% of the insured deposits remain pending due to issues such as Post-No-Debit (PND) instructions, the absence of BVNs, and missing alternative accounts. The NDIC is actively contacting these depositors via phone and text messages to resolve the issues and complete the verification process.
For depositors with amounts exceeding the insured limit of N5 million, the NDIC is working to recover and liquidate the bank’s assets to facilitate payment of these uninsured amounts as liquidation dividends. The NDIC assured that efforts are underway to recover the bank’s assets and that payments to uninsured depositors will be made once the assets are realized and debts recovered.
The CBN’s action to revoke Heritage Bank’s license underscores its commitment to maintaining a sound financial system in Nigeria and reinforcing public confidence in the banking sector. Despite previous supervisory measures to address the bank’s deteriorating financial condition, Heritage Bank failed to meet regulatory standards, prompting the closure.
The NDIC’s efficient response in paying a significant portion of the insured deposits reflects its commitment to safeguarding depositors’ interests and ensuring prompt reimbursement in line with its mandate.
