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Revocation: NDIC Begins Heritage Bank Liquidation, Depositors’ Repayment Capped At N5million

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Subsequent to the revocation of the banking license of Heritage Bank by the Central Bank of Nigeria, on Monday, the Nigeria Deposit Insurance Corporation (NDIC) has commenced the process of liquidating the bank and ensuring that depositors’ interests are safeguarded.

A statement issued by the NDIC Director Communication & Public Affairs, Bashir Nuhu, disclosed that the corporation’s action was premised on the relevant laws as enshrined in in Section 55 subsections 1 and 2 of the NDIC Act 2023.

The process, according to him, will entail immediate verification and payment of insured deposits to the bank’s depositors.

The insured amount is capped at N5 million per depositor, with payments facilitated through the depositors’ Bank Verification Number (BVN) to their alternate bank accounts within the industry.

“Depositors will receive up to N5 million through their alternate accounts, ensuring a smooth and efficient payout process,” stated Bashir A. Nuhu, Director of Communication & Public Affairs at NDIC.

“For those with deposits exceeding N5 million, liquidation dividends will be paid upon the realization of the bank’s assets and recovery of debts.”

He added that “Depositors should visit the nearest branch of Heritage Bank with proof of account ownership, a verifiable means of identification (such as a driver’s license, permanent voter’s card, or National Identity Card), and their BVN to verify their deposits and receive insured sums.

“Alternatively, depositors can file claims online by visiting the NDIC claims page (www.ndic.gov.ng/claims), downloading and filling out the claims forms, and uploading the required documentation.

“The NDIC is committed to ensuring that all depositors are able to access their insured funds promptly and efficiently. We have streamlined the process to minimize inconvenience and provide assurance during this transitional period.”

The statement also advised creditors and debtors to file their claims.

The statement said, “Creditors are advised to file their claims either at the nearest branch of Heritage Bank or via the online platform. The payment process for creditors will commence immediately after the completion of depositor payments.

“Debtors who have yet to repay their loans are instructed to contact the NDIC’s Asset Management Department (AMD) for further guidance. Detailed information is available on the NDIC website.

The NDIC has reassured the public of its dedication to the safety and security of depositors’ funds in all licensed banks. The Corporation emphasized that the revocation of Heritage Bank’s license is an isolated incident and should not undermine confidence in other financial institutions.

“Banks whose licenses have not been revoked remain safe and sound,” Nuhu affirmed. “The NDIC will continue to uphold its mandate of protecting depositors and ensuring the stability of the banking sector.”

On Monday, the Central Bank of Nigeria (CBN) had revoked the banking license of Heritage Bank Plc with immediate effect.

The apex bank announced the decision on June 3, 2024 in a press statement published on its website the same day. The statement was signed by the CBN’s Acting Director, Corporate Communications, Hakama Sidi Ali.

The bank said the decision followed Heritage Bank’s persistent failure to comply with regulatory requirements, as stipulated under Section 12 (1) of the Banks and Other Financial Institutions Act (BOFIA) 2020.

“This action has become necessary due to the bank’s breach of Section 12 (1) of BOFIA, 2020. The Board and Management of the bank have not been able to improve the bank’s financial performance, a situation which constitutes a threat to financial stability.

“This follows a period during which the CBN engaged with the bank and prescribed various supervisory steps intended to stem the decline. Regrettably, the bank has continued to suffer and has no reasonable prospects of recovery, thereby making the revocation of the license the next necessary step.”

The CBN emphasised that the bank’s inability to turn around its fortunes presented a growing threat to the stability of Nigeria’s financial system, leaving the CBN with no choice but to take decisive action.

“Consequently, the revocation of the license was necessary to strengthen public confidence in the banking system and ensure that the soundness of our financial system is not impaired,” the statement said.

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