Heritage Bank: Reps mull increasing NDIC compensation beyond N5 million

The House of Representatives has resolved to review the law establishing the Nigerian Deposit Insurance Corporation, NDIC, and increase the compensation payable to depositors of failed banks.

This resolution was reached on Tuesday following the adoption of a motion moved by Uchenna Okonkwo during plenary on Tuesday.

It would be recalled that the Central Bank of Nigeria revoked the license of Heritage Bank over violation of Section 12 (1) of the Banks and Other Financial Institutions Act (BOFIA), 2020.

Moving the motion, Okonkwo said the N5 million compensation announced by NDIC is insufficient for affected depositors.

He stated that some lost billions of naira to the liquidation of the bank by the CBN.

“Limiting compensation to N5 million is deeply inadequate to alleviate the substantial losses experienced by depositors who had placed their trust in Heritage Bank, exacerbating their financial distress and uncertainty,” he said.

The House resolved to consider regulatory amendments to increase the maximum insured amount to better protect depositors’ interests.

To this, the House stated that “this adjustment would provide greater financial security for depositors in the event of bank failures.”

Furthermore, the House resolved that the CBN should investigate the management of the bank for possible cases of mismanagement.