Heritage Bank liquidation: Our success story so far with depositors’ reimbursement – NDIC MD
The Managing Director/Chief Executive Officer of the Nigerian Deposit Insurance Corporation (NDIC), Bello Hassan has explained how far the Corporation has gone with the settlement of depositors of the defunct Heritage Bank.
According to him, the Corporation has successfully paid 94 per cent of insured depositors of the defunct bank.
Hassan revealed this in his keynote address at the ongoing Financial Correspondents Association of Nigeria (FICAN) workshop, themed “Strengthening Nigeria’s Financial Safety -Set: The role of NDIC” in Lagos.
NewsClick Nigeria reports that the Central Bank of Nigeria (CBN) had on Monday, June 3 revoked the operational license of the bank citing failure of the board of directors of the defunct bank to improve its financial performance.
Hassan said the Corporation began settling insured depositors with balances below N5 million within four days of the bank’s closure, setting a new benchmark for swift action.
He attributed delay in settling the remaining depositors to administrative constraints, such as depositors’ irregular records, Bank Verification Number (BVN) irregularities, and unavailable alternate accounts, among other issues.
The MD/CEO also reiterated that deposits exceeding N5 million will be paid once the asset verification, recovery, and disposition processes of the defunct bank are completed.
Hassan emphasized that in today’s rapidly evolving financial landscape, maintaining the stability of Nigeria’s banking sector remains a top priority for the NDIC.
He said: “This was achieved using the bank verification numbers as a unique identifier to locate depositors’ alternate accounts with other banks without the need to fill forms or visit NDIC offices.
“This innovative approach has indeed enabled the payment of more than 80 per cent of depositors’ BVN-linked accounts to date. The prompt payment of depositors, coming at a time when the corporation had also recently increased the deposit insurer’s coverage from N500,000 to N5 million in deposit money banks, significantly cushioned the negative impact of bank failure, especially during the current challenging economic climate. This achievement is consistent with the provisions of the International Association of Deposit Insurers Co-Principle 15, which emphasizes the timely payout of depositors of failed banks,” he 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”.
Emphasising the critical role of the media in raising public awareness about the NDIC’s activities and mandate to stabilize the nation’s financial ecosystem, “The NDIC’s broader mandate goes beyond immediate depositor reimbursement.
“Its efforts to protect depositors with balances exceeding the insured amount of five million naira, through the liquidation of assets and debt recovery from failed banks, exemplifies its long-term commitment to financial stability.
“Confidence is key in maintaining the financial system’s stability, and the role of deposit insurance cannot be overemphasized,” the MD remarked, highlighting how NDIC continues to build trust in Nigeria’s banking system through timely and effective interventions.
The two-day workshop will conclude today (Friday) with syndicate group presentations.
