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BVN Troubles: NDIC Explains Delay in Paying Heritage Bank Depositors

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The Nigeria Deposit Insurance Corporation (NDIC) has identified account name discrepancies in Bank Verification Number (BVN) linked to the alternate accounts of some defunct Heritage Bank customers as the reason behind delayed payments of their insured deposits.

Managing Director of NDIC, Bello Hassan, disclosed this to the News Agency of Nigeria in Abuja on Sunday.

Hassan clarified that NDIC had already disbursed substantial amounts to depositors without BVN-related account issues but encountered challenges with accounts where names did not match or had discrepancies.

He said, “We have already commenced the payment of customers since June 6. We have paid a substantial amount to the customers.

”What we leverage in making the payment is the BVN of customers. We trace alternate accounts in other banks and pay them their insured amounts.

”There are some that we have challenges linking up because of some discrepancies between the names and others.

”We are calling on customers that have not received their alerts in their alternate accounts to come forward and complete their verification forms so that we can pay them.”

He urged affected depositors to visit the NDIC website and complete verification forms to facilitate their payment.

“For customers with deposits exceeding five million naira, NDIC will distribute liquidation dividends,” Hassan assured.

“That is what we use in paying those liquidation dividends. We are not going to wait until we recover everything, no.

”As we recover, we will also advertise to say that we will pay liquidation dividends so that concerned depositors will be on the look out for alerts in their accounts,” Hassan said.

He added that NDIC had begun the process of liquidating physical assets and recovering loans to fund these dividends.

The Central Bank of Nigeria (CBN) revoked Heritage Bank Plc’s operational license on June 3 due to persistent financial underperformance, which threatened financial stability.

The apex bank announced the decision on June 3, 2024 in a press statement published on its website 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.

Following the revocation, the Nigeria Deposit Insurance Corporation (NDIC) was appointed as the liquidator of Heritage Bank, in accordance with Section 12 (2) of BOFIA 2020.

Heritage Bank, a once-promising financial institution with deep historical roots and a substantial presence across the nation struggled before its eventual demise.

Heritage Bank’s journey began in the late 1970s as Societe Generale Bank (Nigeria), founded by the late Dr. Olusola Saraki.

Societe Generale Bank experienced significant growth but faced challenges in 2006 when it was closed by the CBN for failing to meet new minimum capital requirements.

Societe Generale successfully challenged the closure in court, and in December 2012, the CBN re-issued its banking license as a regional bank.

In 2012, IEI Plc, through its subsidiary IEI Investments Limited, acquired the Societe Generale Bank of Nigeria license from the CBN.

Following this acquisition, the bank was rebranded as Heritage Banking Company Limited and resumed operations under the new name on March 4, 2013.

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