NDIC boss explains delay in refunds to some Heritage Bank depositors

The Managing Director of the Nigeria Deposit Insurance Corporation (NDIC), Mr. Bello Hassan, revealed that some insured depositors of the defunct Heritage Bank Limited have yet to receive refunds due to their failure to provide alternative bank account information.

Hassan made this statement during the opening of the 2024 NDIC workshop for Business Editors and members of the Finance Correspondents Association of Nigeria (FICAN) in Lagos.

Heritage Bank’s operating license was revoked by the Central Bank of Nigeria (CBN) on June 2, 2024, leading to its liquidation and the commencement of refunds for insured depositors through the NDIC.

Giving update on this process, Hassan stated: “For the depositors of Heritage Bank, we have paid substantially all the insured depositors. The only group of insured depositors that we have not paid are those with no alternate accounts in other banks, and they have not come forward to also provide those alternate accounts so that we can pay them.

“We have also not paid insured depositors whose account is on post-no-debit, PND, order, either by order of court or regulatory agencies due to issues around fraud or know-your customer, KYC, requirements”. Hassan also said since the Corporation has paid the insured amount considerably, it is now making efforts to recover the assets of the collapsed bank in terms of physical assets and the debts, so that it can pay the uninsured depositors in form of liquidation dividend.

Speaking further of Heritage Bank, the NDIC boss said that the success achieved in payment of insured deposits was made possible by the Bank Verification Numbers (BVN) of the customers.

His words, “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.

“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.

“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.“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 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.”

According to the MD, 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 defunct bank.

He added that NDIC’s responsibilities extended to the creditors of the defunct bank, who would 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 said.