84.98 percent of Heritage Bank depositors whose accounts were connected to bank verification numbers (BVNs) have been compensated, according to the Nigeria Deposit Insurance Corporation (NDIC).
Speaking on Thursday at the 21st NDIC workshop for business editors and the Finance Correspondents Association of Nigeria (FICAN), Bello Hassan, managing director and CEO of NDIC, gave a speech.
The Central Bank of Nigeria (CBN) cancelled Heritage Bank’s licence on 3rd June, citing the lender’s “inability to improve its financial performance.”
Following the ruling, the NDIC announced that each Heritage Bank depositor will get up to N5 million. The company announced two days later that it had already begun paying bank deposits.
On July 1, however, the NDIC announced that some clients’ payments were being delayed due to differences in bank verification numbers (BVN). The company announced on August 12 that it has compensated customers of the bank that closed 82.36 percent of its insured money.
Speaking about the development, Hassan stated that it complies with the International Association of Deposit Insurers (IADI) Core Principle 15, which places a strong priority on paying out deposits to customers of bankruptcies on time.
According to him: “Acting in accordance with the relevant provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020 and the NDIC Act 2023, the NDIC was appointed liquidator to manage the orderly resolution of the bank and oversee the payment of its depositors and other claimants.”
Continuing, he went on to say: “In the discharge of this critical role of depositor reimbursement, 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.
“This was achieved 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.
“This innovative approach has, indeed, enabled the payment of 84.98% of depositors with BVN-linked accounts to date,” he added.
He claimed that timely depositor payments greatly reduced the detrimental effects of bank collapse, particularly in the difficult economic environment we currently find ourselves in.
After depositors have been largely reimbursed for their protected deposits, the head of NDIC reaffirmed the organization’s commitment to making sure that depositors with balances over N5 million receive the remaining portion of their deposits.
According to Hassan, to guarantee prompt payment of the uninsured deposits of Heritage Bank, the company has already started the process of debt recovery and the realisation of investments and tangible assets of the closed bank, BrandSpur banking and finance news reports.
He stated: “These uninsured deposits represent a significant portion of the total deposits in Heritage Bank.”
He still had this to say: “In this regard, 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.”
The sale of 48 bank properties and chattel, including automobiles, office equipment, plant, and machinery, situated in 62 distinct locations around the nation, was announced by the NDIC on June 13. The bank’s head office and annexe, at 143 and 130 Ahmadu q1Bello Way, Victoria Island, Lagos, were up for sale. Included in the listing were buildings, furniture, a generator, and a car.
Six distinct locations in Lagos, four in Abuja, four in Rivers state, and other properties are among the others. “Payments to creditors will be made once all depositors have been reimbursed.”
According to Hassan, payments to the bank’s creditors would come when all depositors have been paid in full. He emphasised that preserving public confidence in the banking system and advancing financial stability depend on an orderly procedure based on asset realisation and claim precedence.
According to Hassan, the way the NDIC handled the Heritage Bank liquidation shows how important it is for “depositors can be rest assured that their funds are protected,” even during difficult financial circumstances.
