1. The Nigerian Deposit Insurance Commission (NDIC) has started the process of liquidating failed Heritage Bank and will verify and pay the bank depositors.
2. The Central Bank of Nigeria (CBN) revoked the bank’s license due to its breach of regulations and its inability to improve its financial performance.
3. Depositors will be paid up to N5 million, and those with funds exceeding that amount will be paid liquidation dividends upon the recovery of the bank’s assets and debts owed to the bank.
The Nigerian Deposit Insurance Commission (NDIC) has begun the process of liquidating failed Heritage Bank and verifying and paying the bank’s depositors. This action follows the revocation of the bank’s license by the Central Bank of Nigeria (CBN). The CBN stated that the license was revoked due to the bank’s breach of Section 12(1) of the BOFIA, 2020 and its inability to improve its financial performance, which posed a threat to financial stability.
As the liquidator of the bank, the NDIC issued a statement outlining the payment process for depositors. Depositors with an alternate account within the industry will be paid up to the insured amount of N5m per depositor using their Bank Verification Number (BVN) to locate their alternate account. Depositors with funds in excess of N5m will be paid liquidation dividends upon the recovery of the bank’s assets and debts owed to the bank.
Depositors of the defunct bank without an alternate bank account are advised to visit the nearest branch of the bank with proof of account ownership and verifiable means of identification, such as a driver’s license, permanent voter’s card, or national identity card, along with their alternate account and BVN for the verification of their deposits and subsequent payment of insured sums or file an online claim on the NDIC website.
The NDIC also urged the bank’s creditors to visit the nearest branch of the bank to file their claims or use the online platform. Creditors will be paid after depositors, and the bank’s debtors who have yet to complete loan repayments are advised to do so.
In response to the revocation of Heritage Bank’s license, the Bank Customers Association of Nigeria has expressed support for the decision, stating that it provides safety for the banking sector.
In my opinion, the liquidation of Heritage Bank and the subsequent verification and payment process for depositors is a necessary step to protect the financial stability of the banking sector in Nigeria. The breach of Section 12(1) of the BOFIA, 2020 and the bank’s failure to improve its financial performance posed a significant threat, and the revocation of the license was a responsible action by the Central Bank of Nigeria.
The NDIC’s approach to paying depositors is fair, with those with alternate accounts receiving up to the insured amount of N5m and those with higher funds being paid liquidation dividends. The verification process for depositors without alternate bank accounts is also reasonable, requiring proof of ownership and identification. The online claim option is a convenient solution for those who prefer a digital approach.
The support from the Bank Customers Association of Nigeria indicates that the decision to revoke Heritage Bank’s license is seen as a positive step for the overall health of the banking sector. This support further reassures depositors that their funds are secure in licensed banks.
Overall, the liquidation process should help restore confidence in the banking sector and protect depositors’ funds, which is crucial for maintaining financial stability in Nigeria.
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