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NDIC commences payment to Heritage Bank’s depositors

By Esther Agbo

The Nigerian Deposit Insurance Commission (NDIC) has begun the liquidation process of failed Heritage Bank, with verification and payment of deposits to the bank’s customers.

This is happening after its appointment as liquidator of the Bank, by the Central Bank of Nigeria.

Recall that the Central Bank of Nigeria (CBN) revoked Heritage Bank’s license over its failure to improve its financial performance despite supervisory steps.

In a signed statement by the Acting Director of Corporate Communication, Hakama Sidi Ali, the CBN said, “This action has become necessary due to the Bank’s breach of Section 12 (1) of BOFIA, 2020. The board and management of the bank have not been able to improve the bank’s financial performance, a situation which constitutes a threat to financial stability.

“This follows a period during which the CBN engaged with the bank and prescribed various supervisory steps intended to stem the decline. Regrettably, the bank has continued to suffer and has no reasonable prospects of recovery, thereby, making the revocation of the license the next necessary step.”

As the appointed liquidator, depositors will get up to N5 million, using their Bank Verification Number to locate their alternate account.

This was made known in a statement issued by NDIC, signed by the Director, Communication & Public Affairs of the Corporation, Bashir Nuhu.

The statement read, “Depositors of the bank that have an alternate account within the industry will be paid up to the insured amount of N5 million per depositor using their Bank Verification Number to locate their alternate account. Depositors with funds in excess of N5 million will be paid liquidation dividends upon realisation of the bank’s assets and recovery of debts owed to the bank.

“All depositors of the defunct bank without alternate bank account in the industry are advised to visit the nearest branch of the bank with proof of account ownership, verifiable means of identification such as driver’s license, permanent voter’s card, National Identity Card, together with their alternate account and Bank Verification Number for the verification of their deposits and subsequent payment of insured sums or file an online claim on the NDIC website.”

The Corporation urged the bank’s creditors to visit the nearest branch of the bank to file their claims or via the online platform.

“The NDIC wishes to assure the entire banking public of its commitment to the continuous safety of depositor’s funds in all licensed banks. As such, depositors are urged to continue their banking businesses without fear, as banks whose licences have not been revoked remains safe and sound.”

In addition, the House of Representative’s spokesman, Akin Rotimi in a statement noted that the house is fully aware of the Heritage Bank’s license revocation and has pledged to engage with stakeholders to ensure depositor’s funds are protected and the financial system remains stable.

“We assure the public, particularly depositors and stakeholders of Heritage Bank, that the House is committed to carrying out its constitutional oversight functions to ensure that this development does not negatively impact Nigerians. The relevant House Committees on Banking Regulations and Insurance will be up to their duty, to thoroughly examine the circumstances surrounding this decision and the subsequent steps taken by the NDIC.

“Our priority is to safeguard the interests of all depositors and maintain the stability of the financial system. We will engage with the CBN, NDIC, and other relevant stakeholders to ensure a transparent and orderly resolution process, providing necessary support to mitigate any potential negative impact on the public.

“We urge the CBN and NDIC to establish clear channels of communication to allay the fears of the public and prevent any loss of trust in our financial system. Effective public engagement is crucial to maintaining confidence during this period.”

Contributing, the Chairman of the House Committee on Banking Regulations, Mohammed El-Rufai, added, “The committee will closely monitor the liquidation process to ensure that the rights of depositors are protected and that the process adheres to the highest standards of transparency and accountability.”

While the Chairman of the Committee on Insurance and Actuarial Matters, Ahmed Jaha, in his statement said, “We will work diligently to oversee that the NDIC executes its mandate effectively, ensuring the protection of depositor’s funds and maintaining confidence in the financial sector. The NDIC Act and the Banks and Other Financial Institutions Act are clear in their provisions that depositor’s funds are insured and protected.”

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