The Managing Director of the Nigeria Deposit Insurance Corporation (NDIC), Mr. Bello Hassan, has revealed that some depositors of the defunct Heritage Bank Limited are yet to receive their refunds due to failure to provide necessary details of alternative bank accounts.
Hassan made this statement during the 2024 NDIC workshop for Business Editors and members of the Finance Correspondents Association of Nigeria (FICAN) in Lagos.
Heritage Bank’s operating license was revoked by the Central Bank of Nigeria (CBN) on June 2, 2024, leading to the bank’s liquidation. The NDIC subsequently began the refund process for insured depositors.
Updating on the progress of the payments, Hassan explained, “For the depositors of Heritage Bank, we have paid substantially all the insured depositors. The only group of insured depositors that we have not paid are those with no alternate accounts in other banks, and they have not come forward to also provide those alternate accounts so that we can pay them.
“We have also not paid insured depositors whose account is on post-no-debit, PND, order, either by order of court or regulatory agencies due to issues around fraud or know-your customer, KYC, requirements.”
As the NDIC has substantially settled insured deposits, the agency is now focused on recovering the bank’s physical assets and debts in order to reimburse uninsured depositors through liquidation dividends.
Hassan further explained that the successful payment of insured deposits was largely facilitated by the use of Bank Verification Numbers (BVN), which allowed NDIC to locate depositors’ alternative bank accounts without requiring additional paperwork or physical visits to NDIC offices.
“This innovative approach has indeed, enabled the payment of 84.98% of depositors with BVN linked accounts to date,” he said.
The MD also highlighted that the NDIC had recently increased its deposit insurance coverage from ₦500,000 to ₦5 million for deposit money banks.
This increase helped mitigate the financial impact of the bank’s collapse, especially given the ongoing economic challenges.
Beyond this, Hassan reassured depositors with balances exceeding ₦5 million that efforts are underway to ensure they are paid the remaining balances through liquidation dividends.
“These uninsured deposits represent a significant portion of the total deposits in Heritage Bank,” he said, adding that the NDIC is actively working to recover the bank’s debts and realise its assets to facilitate these payments.
Hassan also noted that creditors of the defunct bank would receive payments once all depositors had been reimbursed.
“This orderly process, based on asset realisation and priority of claims, is essential in maintaining public trust in the banking system and promoting financial stability.
“The handling of the Heritage Bank liquidation illustrates the broader role of the NDIC in ensuring that even in times of financial disruption, depositors can be rest assured that their funds are protected,” he concluded.
The liquidation of Heritage Bank highlights NDIC’s broader responsibility to protect depositors, even during financial upheaval.
