- The Nigeria Deposit Insurance Corporation has commenced a public auction of the assets of the defunct Heritage Bank
- The NDIC boss said the process shall follow laid down extant public procurement guidelines
- NDIC reiterates its commitment to ensuring financial sector stability by protecting depositors’ funds
The Nigeria Deposit Insurance Corporation (NDIC) has begun selling landed properties and chattels of the defunct Heritage Bank.
Managing Director and Chief Executive Officer of the NDIC, Bello Hassan, disclosed this during the corporation’s special day at the ongoing 45th Kano International Trade Fair.
Hassan added that the process is by competitive public auction and shall follow laid down extant public procurement guidelines aimed at ensuring transparency, fair competition, and accountability.
He said the public auction is to enable recovery of commensurate values from the exercise toward the payment of liquidation dividends to the defunct bank's uninsured depositors.
The NDIC boss chronicled the corporation’s efforts since the revocation of the bank’s licence and its appointment as the bank’s liquidator by the Central Bank of Nigeria (CBN).
He reiterated that insured depositors have been largely reimbursed, and the bank’s creditors will be paid after the liquidation of the bank’s assets.
Hassan said, “Having largely reimbursed depositors their insured deposits, the corporation is committed to ensuring that depositors with balances exceeding N5 million are also paid the balance of their deposits. These uninsured deposits represent a significant portion of the total deposits in Heritage Bank.
“In this regard, the corporation is already working assiduously to ensure that depositors with amounts in excess of the maximum insured amount of N5 million are paid through liquidation dividends from the realisation of the defunct bank’s assets and recovery of debts.
“Additionally, the NDIC’s responsibilities extend to the creditors of the defunct bank, who will receive payments after all depositors have been fully reimbursed. This orderly process, based on asset realisation and priority of claims, is essential in maintaining public trust in the banking system and promoting financial system stability.
“The corporation today, 4th December 2024, commenced sales of landed properties and chattels of the bank nationwide. This process, which is by competitive public auction, shall follow laid down extant public procurement guidelines aimed at ensuring transparency, fair competition and accountability to enable recovery of commensurate values from the exercise toward the payment of liquidation dividend to the uninsured depositors.”
NDIC is committed to protecting bank customers
The NDIC boss stressed that the NDIC is instrumental in promoting stability in the banking sector by ensuring that depositors are protected when banks fail.
He also urged Heritage Bank depositors who have not been paid to come forward with their Bank Verification Numbers and other identifiers for reimbursement.
Hassan said, “As a critical component of the financial safety net, the NDIC reassures depositors about the safety of their funds, thereby fostering trust in the banking system and preventing the risk of bank runs during periods of uncertainty. This contributes significantly to the overall stability of the financial system.
“Moreover, I encourage depositors of any closed bank, especially Heritage Bank, who are yet to receive their payments, to come forward with their BVN, proof of account ownership, verifiable means of identification, and alternative account details.
“Depositors can submit their claims through our various channels, including our website, email, and social media platforms, as we remain committed to ensuring the safety of depositors’ funds.”
NDIC’s efforts to reimburse Heritage Bank depositors
Following Heritage Bank’s licence revocation by the Central Bank of Nigeria (CBN) on June 3, the NDIC assumed the role of the bank’s liquidator, resolving the bank’s affairs and protecting depositors.
The NDIC promptly began reimbursing depositors to the insured deposit limit of N5 million per depositor within four days of the bank’s closure by utilising Bank Verification Numbers (BVN) to identify depositors’ alternate accounts in other banks.
In August, the NDIC said it had paid about 82.36 per cent of the defunct bank's total insured deposits, while the remaining 17.64 per cent belonged to depositors whose accounts had post no debits (PND) instructions or no BVN.
On depositors with amounts above the maximum insured deposit of N5 million, which make up a larger chunk of total deposits of the defunct bank, the NDIC said this category of depositors will be promptly paid through liquidation dividend realised from the bank’s assets and debts totalling N700 billion.
Heritage Bank: What happens to depositors’ funds when a bank’s licence is revoked? (Explainer)
Meanwhile, TheRadar reported that Nigerians woke up on Monday, June 3, to the news of the revocation of the operating licence of Heritage Bank by the CBN to ensure public confidence in the financial system as the bank’s non-performance is a threat to financial stability.
Following this, TheRadar explained what becomes of depositors’ and shareholders’ funds in the event of a revocation of a bank’s licence.
