The Nigeria Deposit Insurance Corporation (NDIC) has successfully paid 82.36% of insured deposits to customers of the now-defunct Heritage Bank. The Central Bank of Nigeria (CBN) revoked the bank’s license on June 3, 2024.
Payment Details
In a statement released by Bashir A. Nuhu, Director of Communication & Public Affairs, the NDIC confirmed that payments have been made to depositors with a maximum of N5 million per person. This process was completed within four days of the bank’s closure, using Bank Verification Numbers (BVN) to identify and locate depositors’ alternate accounts in other banks.
The statement read:
“In the discharge of its deposit guarantee mandate, the Corporation began the payment of the insured deposits of Five Million Naira (N5,000,000) maximum per depositor within a record time of four (4) days of the bank closure. This was achieved using BVNs as a unique identifier to locate depositors’ alternate accounts in other banks. Depositors with balances exceeding Five Million Naira have been paid the insured sum of Five Million Naira, while the remaining balances (classified as uninsured deposits) will be paid as liquidation dividends upon realization of the defunct bank’s assets and recovery of debts owed to the defunct bank.”
This achievement marks a significant milestone in the NDIC’s efforts to ensure prompt reimbursement of depositors. About 82.36% of the total insured deposit has already been paid.
Issues with Remaining Deposits
The remaining 17.64% of insured deposits are pending due to various issues, such as Post-No-Debit (PND) instructions, absence of BVN, or lack of alternative bank accounts. The NDIC is working to resolve these issues by contacting affected depositors through phone calls and text messages.
The statement noted:
“The remaining 17.64% of the insured deposits yet to be paid are largely from depositors with post no debit instructions or who lack BVN. Others include those with no alternative accounts or accounts with KYC limits. These depositors are being contacted by the Corporation for verification.”
Next Steps for Uninsured Deposits
For depositors with amounts exceeding the insured limit of N5 million, the NDIC is working on recovering and liquidating the bank’s assets. These uninsured amounts will be paid as liquidation dividends once the bank’s assets are realized and debts recovered.
The NDIC assured:
“The Corporation has initiated the process of debt recovery and realization of investments and physical assets of the defunct bank to ensure timely reimbursement of uninsured depositors. After full payment of both insured and uninsured deposits, we will proceed with the payment of creditors in accordance with the priority of claims as provided in the extant law.”
Background
The CBN revoked Heritage Bank’s license due to persistent financial instability and regulatory breaches. This action is part of the CBN’s mandate to maintain a sound financial system in Nigeria, as outlined under Section 12 of the Banks and Other Financial Institutions Act (BOFIA) 2020. Despite various supervisory measures, Heritage Bank could not improve its financial health, prompting the CBN’s intervention to safeguard public confidence in the banking sector.
