UPDATE: NDIC Completes 84.98% Payment to Depositors of Defunct Heritage Bank
The Nigeria Deposit Insurance Corporation (NDIC) said it has paid 84.98 per cent of the depositors whose funds are trapped in liquidity to the Heritage Bank.
The CBN announced the revocation of the licence of Heritage Bank in June and appointed the NDIC as the liquidator.
The Managing Director/Chief Executive Officer of NDIC, Mr Bello Hassan who disclosed this in Lagos at the seminar organised by NDIC for Finance Correspondents Association of Nigeria (FICAN) said the Corporation began the payment of the insured deposits of N5 million maximum per depositor within a record time of four days of the bank’s closure.
He said the Corporation was able to achieve this payment by using Bank Verification Numbers (BVN) as a unique identifier to locate depositors’ alternate accounts in other banks without the need to fill forms or visit the NDIC offices.
He explained that 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, according to him, is consistent with the provisions of the International Association of Deposit Insurers (IADI) Core Principle 15, which emphasizes timely payouts to depositors of failed banks.
He however said that having largely reimbursed depositors their insured deposits, the Corporation is committed to ensuring that 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.
In this regard, he said the Corporation is already working assiduously to ensure that, 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.
He further pointed out 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.
He stated that the NDIC’s responsibilities extend to the 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.
He stated that 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.
