Payment to depositors with liquidated Heritage Bank having N5 million and below will begin on Monday, the Nigeria Deposit Insurance Corporation (NDIC) said Monday.
Depositors with more than N5 million will wait for their balance until the assets of the liquidated bank are disposed off and money generated, before they are paid.
The Central Bank of Nigeria (CBN) revoked the operating licence of Heritage Bank on Monday.
According to the apex bank, Heritage failed to meet its obligations.
A statement by CBN spokesperson Hakama Sidi-Ali said: “The bank’s Board and Management failed to improve its financial performance, posing a risk to the financial stability of the country. Despite various supervisory measures taken by the CBN to help the bank recover, Heritage Bank continued to struggle without any reasonable prospects of recovery.”.
NDIC Director of Communication and Public Affairs Bashir Nuhu, confirmed that payments to depositors will begin on Monday.
Nuhu said Heritage Bank customers with alternate accounts in other banks will be paid up to the insured amount of N5 million per depositor.
Payments will be facilitated using the depositors’ Bank Verification Numbers (BVN) to identify their alternate accounts. Those with deposits exceeding N5 million will receive additional payments, known as liquidation dividends, after the bank’s assets are sold and debts are recovered.
To facilitate this process, the NDIC and the Central Bank of Nigeria (CBN) are working this week to identify depositors with alternate bank accounts, ensuring they receive their funds promptly starting on Monday.
Nuhu emphasized that depositors with verified BVNs and alternate bank accounts do not need to visit their banks or the NDIC to receive their payments.
For depositors without alternate bank accounts, Nuhu advised them to visit the nearest branch of Heritage Bank with proof of account ownership, a verifiable means of identification (such as a driver’s license, permanent voter card, or National Identity Card), and their BVN.
They can also file their claims online by visiting the NDIC website, downloading the claims form, and uploading the required documents.
Creditors of Heritage Bank are also advised to visit the nearest bank branch or use the online platform to file their claims. Payments to creditors will begin immediately after all depositors have been paid.
Debtors of Heritage Bank who have not yet completed their loan repayments have been instructed to contact the NDIC’s Asset Management Department (AMD) and visit the NDIC website to fill out the required documents. Assets recovered from these debtors will be used to pay depositors and creditors of Heritage Bank.
The NDIC reassured the banking public of its commitment to protecting depositors’ funds in all licensed banks. Depositors are encouraged to continue their banking activities without fear, as banks with valid licenses remain safe and sound.
Last month, the NDIC announced an increase in deposit coverage from N500,000 to N5,000,000, now fully covering 98.98 percent of depositors.
NDIC’s Managing Director, Bello Hassan, stated that the corporation collects premiums annually to fund the deposit insurance system, maintaining over N2 trillion in these funds.
This increase in insured deposit coverage was as a result of factors such as inflation, exchange rates, and per capita GDP. Ensuring swift payment to depositors, often within seven days, has become a global best practice.
Hassan clarified that the increase in coverage will not necessarily lead to higher premiums for banks. The NDIC has moved to a risk-based premium framework, where banks managing risks effectively will pay the base rate of 35 basis points, while those with higher risk profiles could face premiums up to 65 basis points.
The NDIC’s actions is meant to ensure stability and confidence in Nigeria’s banking system, provide a safety net for depositors and maintain public trust in the financial sector.
Reps to engage CBN, NDIC, stakeholders
The House of Representatives committee will look into the liquidation of Heritage Bank by the CBN to provide necessary support to mitigate any potential negative impact on the public.
Spokesman of the House, Akintunde Rotimi, said in a statement that “the House of Representatives is aware of the revocation of the licence of Heritage Bank (under liquidation) by the CBN and the appointment of the Nigeria Deposit Insurance Corporation (NDIC) as the liquidators, in accordance with the provisions of the Banks and Other Financial Institutions Act (BOFIA).
“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, thoroughly examining the circumstances surrounding this decision and the subsequent steps taken by the NDIC.”
