NDIC settles 85% of defunct Heritage Bank’s depositors

About 84.98 per cent of the depositors of the defunct Heritage Bank have been settled, the Nigeria Deposit Insurance Corporation (NDIC) has said.The Managing Director of the Corporation, Bello Hassan, disclosed this while delivering a keynote address at the 2024 NDIC, Finance Correspondents Association of Nigeria (FICAN) workshop in Lagos, yesterday.

He said: “This innovative approach has indeed, enabled the payment of 84.98 per cent of depositors with BVN-linked accounts to date. The prompt payment of depositors, coming at a time when the Corporation had also recently increased the deposit insurance 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 (IADI) Core Principle 15, which emphasises timely payouts to depositors of failed banks.”

While expressing satisfaction with the level of disbursement, Bello said the Corporation is committed to ensuring that depositors with balances exceeding N5 million are also paid the balance of their deposits. He clarified that the ongoing settlement of under five million deposits represents the largest portion of the entire deposit in the liquidated bank, adding,

“These uninsured deposits represent a significant portion of the total deposits in Heritage Bank. In this regard, the Corporation is already working assiduously to ensure that, all depositors with amounts over the maximum insured amount of five million naira are paid through liquidation dividends from the realisation of the defunct bank’s assets and recovery of debts.”

The NDIC chief further disclosed that the Corporation 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 bank.

He explained that the NDIC’s responsibilities cover creditors of the defunct bank, who will receive payments after all depositors have been fully reimbursed.

“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. The handling of the Heritage Bank liquidation illustrates the broader role of the NDIC in ensuring that even in times of financial disruption, depositors can be rest assured that their funds are protected,” he stated.

He stated that banks hardly fail in Nigeria owing to a set of very stringent regulations.Bello stressed that effective supervision and regulation are crucial to curtailing the failure of banks. He urged the media and civil society groups to continue to play their watchdog roles towards ensuring a stable financial system.

His words: “I must emphasise the important role of the media and civil society groups, alongside corporate affairs managers of banks, in advocating for the effective implementation of the deposit insurance system. Through your efforts, the achievements of the NDIC have become more visible and better understood, reinforcing the Corporation’s enduring impact in contributing to the stability of the financial system. By working together, we can continue to build a more resilient financial system that protects the interests of all stakeholders. Your dedication to promoting the understanding of the NDIC’s mandate and activities has been pivotal in deepening public trust in Nigeria’s banking system.”