It’s All Smiles For 84% Of Heritage Bank Depositors With BVN-Linked Accounts – NDIC

BY CHINYERE OBIORA, LAGOS – Despite complaints and concerns raised by some stakeholders, the Nigeria Deposit Insurance Corporation (NDIC) says about 84.98 percent of depositors of Heritage Bank in revocation have received their settlement.

Also, the Corporation has already initiated the process of debt recovery as well as realisation of investments and physical assets of the defunct bank to ensure timely payment of its uninsured deposits

The Managing Director and Chief Executive Officer of NDIC, Mr Bello Hassan said this milestone was achieved because the Corporation swung into action immediately the Central Bank of Nigeria (CBN) revoked Heritage Bank license in June 2024 and appointed the NDIC as the liquidator.

According to Hassan, this proactive move saw the Corporation commencing payment of the insured deposits of N5 million maximum per depositor within a record time of four days after the bank’s closure.

Bello, who spoke at the 21st annual workshop organised by NDIC for Business Editors and Finance Correspondents Association of Nigeria (FICAN) in Lagos, said the Corporation was able to achieve this significant payment level using the Bank Verification Numbers (BVN) as a unique identifier to locate depositors’ alternate accounts in other banks without the need to fill forms or visits the NDIC offices.

He said coming at a time when the Corporation had also increased the deposit insurance coverage from N500,000 to N5 million in Deposit Money Banks (DMBs), the prompt payment to depositors significantly cushioned the negative impact of the bank’s failure, especially given the challenging economic climate in the country.

The NDIC Chief Executive mentioned that achievements recorded are consistent with the provisions of the International Association of Deposit Insurers (IADI) Core Principle 15, which emphasizes timely payouts to depositors of failed bank.

However, he said that having largely reimbursed depositors their insured deposits, NDIC is focused on ensuring depositors with balances exceeding N5 million are also paid the balance of their deposits, adding that these uninsured deposits represent a significant portion of the total deposits in Heritage Bank.

Bello also confirmed that going forward, the Corporation is working assiduously to ensure all 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.

In this regards, he explained that the NDIC has already initiated the process of debt recovery and realisation of investments and physical assets of the defunct bank to ensure timely payment of the uninsured deposits of the defunct bank.

For him, NDIC’s responsibilities extend to the creditors of the defunct bank, who will receive payments after all depositors have been fully reimbursed, adding that this orderly process, based on asset realisation and priority of claims, is essential in maintaining public trust in the banking system and promoting financial stability.

Bello said the robust handling of the Heritage Bank liquidation illustrates NDIC’s broader role in ensuring that even in times of financial disruption, depositors should be assured their funds are safe and protected.

The NDIC Chief Executive described the theme of this year’s FICAN workshop, “Strengthening Nigeria’s Financial Safety-Net – The Role of Deposit Insurance,” as timely and highly relevant, especially in the light of the ever-evolving dynamics of the global financial system and its implications for Nigeria.

“As our financial system continues to evolve and face new challenges, the NDIC remains steadfast in its mission to protect depositors and collaborate with the Central Bank of Nigeria (CBN) in ensuring the stability of the banking sector, which is critical to the growth and development of the economy”, he posited