Fire On Heritage Bank As Depositors Of N5million Crowd Premises, Demand Refund

Fire On the Closed Heritage Bank As Depositors Of N5million Crowd Premises, Demand Refund
Fire On the Closed Heritage Bank As Depositors Of N5million Crowd Premises, Demand Refund

Depositors of the closed Heritage Bank with N5 million or less in their accounts will get covered money, according to a statement from the Nigeria Deposit Insurance Corporation (NDIC).

The banking and finance news disclosed that the Central Bank of Nigeria named NDIC as the bank’s liquidator, and NDIC promised to make sure the payment was made within a week.

At a news conference on Wednesday in Abuja, Bello Hassan, the Managing Director of the NDIC, disclosed that 99 percent of the bank’s 2.3 million depositors had balances of N5 million or less.

He stated, “Our primary objective is to protect depositors and maintain financial system stability. We will start by paying depositors the maximum insured amount of N5m, leveraging the Bank Verification Number facility.”

“Our focus is on depositors and creditors, with depositors taking priority. We will start by paying depositors the maximum insured amount of N5m. Depositors with alternate bank accounts can visit any NDIC branch for payment, while those without can use the NDIC website to claim their insured amount.”

He added that the NDIC would subsequently use the money received from the sale of the bank’s assets to compensate creditors and uninsured deposits. Enabled under the NDIC Act 2023, the NDIC seeks to collect as much as feasible, with roughly N650 billion in deposits and N700 billion in loans. He gave the people confidence that the organisation would use all of its resources to effectively accomplish this aim.

Continuing, he revealed “After paying depositors, we will move on to creditors. Our preliminary assessment shows total deposits of around N650bn, with loans exceeding N700bn.

“We aim to recover these loans, empowered by the NDIC Act 2023, which provides a sufficient legal framework for debt recovery. We assure the public that we will leverage these powers to recover as much as possible, starting immediately,” he added.

The CBN announced the revocation of Heritage Bank’s licence on Monday, citing a regulation violation, in a statement signed by Sidi Ali, the acting Director of Corporate Communication.

He revealed, “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,” he added.

On Wednesday, patrons of the dissolved Heritage Bank convened at the bank’s Lagos headquarters to inquire about the process of obtaining their refunded deposits. The News Agency of Nigeria (NAN) said that security guards kept patrons from accessing the building.

An official speaking through the gate advised the consumers that savings account holders would start receiving payments today and would do so through Friday.

He said, “You don’t need to take any action. NDIC staff are already processing payments. Your money will be transferred to your other account linked with your BVN.”

Corporate account holders, on the other hand, were told to return “next week,” which alarmed some because BVN is usually connected to individual accounts rather than businesses. Customers turned down NAN interviews, keeping the mood solemn.

There was a break of silence and a customer said, “Mine is an entrepreneurship account.”

Security guards blocked a NAN correspondent’s attempt to enter by citing the Central Bank of Nigeria’s June 3 news release, which announced the bank’s licence cancellation, as the answer to all questions.