Defunct Heritage Bank: NDIC Settles 82% Depositors

• Says verification issues stalling payment to remaining 17.6%

The Nigeria Deposit Insurance Corporation (NDIC) says about 82.36 per cent of failed Heritage Bank depositors have received their payments following the bank’s recent liquidation.

This is as the Corporation blamed verification issues for the delay experienced in settling the remaining 17.6 per cent of the affected depositors.

According to a statement by the Corporation, the payment of verified depositors commenced within four days of the Bank’s liquidation following its licence revocation in June and eventual appointment of NDIC as the liquidator by the Central Bank of Nigeria (CBN).

In declaring that Heritage Bank violated section 12 of the Banks and Other Financial Act (BOFIA), the apex Bank said the management was unable improve its financial performance, “a situation which constitutes a threat to financial stability”.

The statement signed by NDIC’s Spokesperson, Bashir Nuhu said; “In the discharge of its deposit guarantee mandate, the Corporation began the payment of the insured deposits of N5m maximum per depositor within a record time of four days of the bank closure. This was achieved using Bank Verification Numbers as a unique identifier to locate depositors’ alternate accounts in other banks.

“However, depositors with balances exceeding N5m have been paid the initial insured sum of N5m, while the remaining balances (classified as uninsured deposits) will be paid as liquidation dividends upon realization of the defunct bank’s assets and recovery of debts owed to the defunct bank.

“This unprecedented achievement of direct payment through BVN-linked alternate accounts without the need for depositors to visit NDIC offices or fill out forms marks a historic shift for the NDIC in the prompt reimbursement of depositors with payment of about 82.36 per cent of the total insured deposit to date.”

On the delay and challenges faced in the payment process, the Corporation said 17.64 per cent of the insured deposits yet to be paid were largely depositors whose accounts had posted no debit instructions or had no BVN.

“Others are those with no alternative accounts in other banks or accounts with KYC limit on the maximum lodgment per day and are yet to come forward for verification. This category of depositors are presently being contacted by the Corporation through telephone calls and text messages to come forward for verification”.

Further explaining issues around the payment of uninsured deposits, the statement said this constituted the larger portion of the total deposits of the defunct bank, adding; “In this regard, the Corporation is already working assiduously to ensure that all depositors with amounts in excess of the maximum insured amount of N5m are timely paid through liquidation dividend from the realisation of the defunct bank’s assets.

“The Corporation has already initiated the process of debt recovery and realisation of investments and physical assets of the defunct bank to ensure timely reimbursement of the uninsured depositors of the defunct bank.

“Subsequently, after the full payment of both insured and uninsured portion of deposits, the Corporation will proceed with the payment of creditors in accordance with priority of claim as provided in the extant law. We will like to reiterate that, all payments other than that of insured deposits, are subject to availability and realisation of assets of the bank in the form of liquidation dividend,” the statement added

While expressing its commitment to the safety and security of depositors’ funds in all licensed banks, the NDIC reassured the public that nation’s banking sector remained stable with depositors’ funds in other licensed banks safe and secured.