- Following Heritage Bank’s shutdown, depositors have been worried about their funds
- But regulators have expressed that insured funds would be paid to depositors’ BVN-linked alternate account
- While the House of Reps assures depositors that their money is safe, customers with funds above N5 million will be paid when the bank’s assets have been liquidated
Following the Central Bank of Nigeria’s (CBN) appointment of the Nigeria Deposit Insurance Corporation (NDIC) as liquidator of Heritage Bank's assets after the CBN revoked its licence, the NDIC has announced the commencement of the bank's liquidation process.
TheRadar recalls that banking licence due to the bank’s inability to improve its financial performance, which is a breach of Section 12(1) of the Banks and Other Financial Institutions Act (BOFIA), 2020.
In a press release signed by the acting Director, Corporate Communications of the CBN, Mrs Hakama Sidi Ali, on Monday, June 3, the CBN said the Heritage Bank’s non-performance constitutes a threat to financial stability.
The apex bank also appointed the NDIC as the liquidator of the bank's assets, a process that involves payment of insured deposits up to the insurable limit to the depositors of the liquidated bank while uninsured depositors and creditors would only have claim on the liquidator from the proceeds of liquidation.
How insured depositors will be paid
The NDIC, in a statement on Monday by the Director, Communication and Public Affairs, Bashir A. Nuhu, said depositors of the bank that have alternate account within the industry will be paid up to the insured amount of N5 million per depositor using their Bank Verification Number (BVN) to locate their alternate account, while depositors with funds in excess of N5 million will be paid liquidation dividend upon realisation of the bank’s assets and recovery of debts owed to the bank.
The statement read, “Verification and payment of depositors without alternate bank account: All depositors of the defunct bank without alternate bank account in the industry are advised as follows: Visit the nearest branch of the bank with proof of account ownership, verifiable means of identification such as driver’s licence, permanent voter’s card, National Identity card, together with their alternate account and Bank Verification Number (BVN) for the verification of their deposits and subsequent payment of insured sums.
“OR File online claim by visiting the NDIC website claims page on www.ndic.gov.ng/claims/claims, download and fill the claims forms and upload the required documentation.
“Verification and payment of creditors: Creditors are also advised to visit the nearest branch of the bank to file their claims or via the online platform. Please note that the process of payment of creditors will commence immediately after all depositors have been paid.
“Debtors’ repayment of loans: Debtors that are yet to complete the repayment of loans are advised to contact the Corporation’s Asset Management Department (AMD). Visit the NDIC website for more details.”
The House of Reps intervenes
Meanwhile, the House of Representatives, through its spokesman, Akin Rotimi, has assured it will engage with relevant stakeholders to ensure the safety of depositors’ funds.
The House, in a statement, said its committees on banking regulations and insurance will thoroughly examine the circumstances surrounding the CBN’s decision and the subsequent steps taken by the NDIC.
It said, “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.”
The Chairman of the House Committee on Banking Regulations, Mohammed El-Rufai, was quoted in the statement to have said, “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.”
His Committee on Insurance and Actuarial Matters counterpart, Ahmed Jaha, said, “We will work diligently to oversee that the NDIC executes its mandate effectively, ensuring the protection of depositors’ 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 depositors’ funds are insured and protected.”
