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The Managing Director of the Nigeria Deposit Insurance Corporation (NDIC), Mr. Bello Hassan, revealed that certain insured depositors of the now-defunct Heritage Bank Limited have yet to receive their refunds due to a lack of necessary information regarding alternative bank accounts.
Mr. Hassan made these statements during the opening of the 2024 NDIC workshop for Business Editors and members of the Finance Correspondents Association of Nigeria (FICAN) in Lagos.
Heritage Bank had its operating license revoked by the Central Bank of Nigeria (CBN) on June 2, 2024, prompting the NDIC to begin the liquidation process and refund insured depositors.
In an update on this situation, Hassan stated, “We have successfully paid out a substantial portion of the insured depositors. However, the remaining group includes those who have not provided alternative accounts in other banks and have not come forward with the required information for payment.”
He also noted that insured depositors with accounts under a post-no-debit (PND) order, whether due to court directives or regulatory agency interventions stemming from fraud or Know Your Customer (KYC) issues, have not yet received payments.
Hassan explained that the NDIC has largely reimbursed the insured amounts and is now focused on recovering the assets of the defunct bank, including physical assets and debts, to facilitate payments to uninsured depositors through liquidation dividends.
Discussing the payment process for Heritage Bank depositors, he highlighted the crucial role of Bank Verification Numbers (BVN) in streamlining the identification and payment process. “This was achieved using BVN as a unique identifier, allowing us to locate depositors’ alternate accounts in other banks without requiring them to fill out forms or visit NDIC offices. As a result, we have successfully paid 84.98% of depositors with BVN-linked accounts to date.”
Hassan emphasized that the timely reimbursement of depositors comes at a critical juncture, especially as the NDIC has recently increased deposit insurance coverage from N500,000 to N5 million for Deposit Money Banks. This enhancement has helped mitigate the negative impact of bank failures during the current challenging economic climate.
“Having largely reimbursed depositors their insured amounts, the NDIC is committed to ensuring that those with balances exceeding N5 million also receive their due amounts. These uninsured deposits account for a significant portion of the total deposits in Heritage Bank. We are diligently working to ensure that all depositors with amounts over the maximum insured limit are compensated through liquidation dividends generated from the recovery of the defunct bank’s assets,” he said.
According to the MD, the NDIC has already commenced the processes of debt recovery and realization of investments and physical assets from the defunct bank to facilitate the timely payment of uninsured deposits.
In related news, the NDIC is also engaging with creditors of the defunct bank, who will receive payments only after all depositors have been fully reimbursed.
“This orderly process, based on asset realization and the prioritization of claims, is essential for maintaining public trust in the banking system and promoting financial stability,” he stated.
“The management of the Heritage Bank liquidation exemplifies the broader role of the NDIC in assuring depositors that their funds are protected, even during financial disruptions,” he concluded.
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