The Nigerian Deposit Insurance Commission (NDIC) has initiated the liquidation process for the failed Heritage Bank, following the Central Bank of Nigeria’s (CBN) revocation of the bank’s operating license. This step involves verifying and compensating the bank’s depositors.
The CBN revoked Heritage Bank’s license on Monday, June 3, citing breaches of Section 12 (1) of the Banks and Other Financial Institutions Act (BOFIA) 2020. According to a statement by the acting Director of Corporate Communication, Sidi Ali, the bank’s board and management were unable to enhance its financial performance, posing a threat to financial stability.
“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,” the CBN statement read.
As the appointed liquidator, the NDIC released a statement, signed by Director of Communication & Public Affairs Bashir Nuhu, detailing the process for depositors to reclaim their funds. Depositors with alternate bank accounts will be paid up to the insured amount of N5 million using their Bank Verification Number (BVN) to locate these accounts. Those with deposits exceeding N5 million will receive liquidation dividends once the bank’s assets are realized and debts recovered.
“Depositors of the bank that have an alternate account within the industry will be paid up to the insured amount of N5 million per depositor using their Bank Verification Number to locate their alternate account. Depositors with funds in excess of N5 million will be paid liquidation dividends upon realization of the bank’s assets and recovery of debts owed to the bank,” the NDIC stated.
For depositors without an alternate bank account, NDIC advised visiting the nearest Heritage Bank branch with proof of account ownership, valid identification (driver’s license, permanent voter’s card, National Identity Card), along with their BVN for verification and subsequent payment of insured sums. Alternatively, claims can be filed online through the NDIC website.
The NDIC also urged creditors of Heritage Bank to visit the nearest branch or use the online platform to file their claims. Creditors will be compensated after depositors. Additionally, debtors who have not completed loan repayments were reminded to fulfill their obligations.
“The NDIC wishes to assure the entire banking public of its commitment to the continued safety of depositors’ funds in all licensed banks. As such, depositors are urged to continue their banking businesses without fear, as banks whose licenses have not been revoked remain safe and sound,” the statement concluded.
This development aims to protect the interests of depositors and maintain confidence in Nigeria’s banking sector amidst the liquidation of Heritage Bank.