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The Nigerian Deposit Insurance Corporation (NDIC) announced that it will start refunding depositors of Heritage Bank within the next week. This development follows the recent liquidation of the bank.
NDIC Managing Director Bello Hassan made the announcement during a briefing in Abuja on Wednesday. He revealed that Heritage Bank’s total deposits stand at N650 billion, while its loan portfolio exceeds N700 billion, according to Channels TV.
Hassan emphasized that NDIC aims to ensure loan repayments within the next six months. He stated, “All depositors are currently being verified for onward payment of insured benefits up to N5 million, while those with deposits exceeding N5 million will receive their payments upon the sale of the bank’s assets.”
The NDIC head further noted that there are approximately 2.3 million depositors at Heritage Bank, with 99 percent of them having total balances of less than N5 million. Heritage Bank operates around 116 branches nationwide.
The NDIC’s assurance of payment offers hope to Heritage Bank customers, who have been anxious following the revocation of the bank’s license. The Central Bank of Nigeria (CBN) revoked Heritage Bank’s license on Monday as part of its mandate to promote a sound financial system in Nigeria and under the powers granted by Section 12 of the Banks and Other Financial Institutions Act (BOFIA) 2020.
In a statement, the Acting Director of Corporate Communications at the CBN, Hakama Ali, explained that Heritage Bank had breached Section 12 (1) of BOFIA, 2020. Ali added that the bank’s Board and Management had failed to improve its financial performance, posing a threat to financial stability.
“This decision follows a period during which the CBN engaged with the bank and prescribed various supervisory steps intended to stem the decline. Unfortunately, the bank continued to deteriorate with no reasonable prospects of recovery, necessitating the revocation of its license,” the statement read.
The CBN’s actions aim to strengthen public confidence in the banking system and ensure the soundness of the financial sector. Subsequently, the NDIC has been appointed as the liquidator of Heritage Bank under Section 12 (2) of BOFIA, 2020.
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