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NDIC Verifies 2.3 Million Heritage Bank Depositors, Pursues N700bn Loan Defaulters

Customers Throng Headquarters Amid  Confusion

…NDIC To Repay  Customers Within One Week

 

The Nigerian Deposit Insurance Corporation (NDIC) has confirmed that 2.3 million depositors of Heritage Bank will receive payouts following the bank’s liquidation. 

The NDIC has  also initiated a significant recovery effort targeting N700 billion in loans defaulted by Heritage Bank.

This move comes on the heels of a comprehensive evaluation of the bank’s financial health, revealing approximately N650 billion in deposits and an outstanding N700 billion in loans.

These  announcements were  made by the NDIC’s Managing Director, Bello Hassan, during a media conference in Abuja. 

The Central Bank of Nigeria (CBN) recently revoked Heritage Bank’s license due to violations of Section 12 (1) of the Banks and Other Financial Institutions Act (BOFIA), 2020.

Hassan revealed that 99 percent of Heritage Bank depositors have balances under N5 million. 

He said all depositors are currently being validated for the insured payout limit of N5 million.

He added that for those with deposits exceeding this amount, reimbursement will occur once the bank’s assets are liquidated.

“Payment to depositors will commence before the end of the week,” Hassan stated, aiming to quell the concerns of anxious clients after the license revocation. 

Heritage Bank’s total deposits amount to N650 billion, while its loan portfolio exceeds N700 billion.

The Managing Director of NDIC, emphasized the agency’s commitment to recovering the defaulted loans, leveraging the enhanced legal framework provided by the NDIC Act of 2023.

“After ensuring the repayment of depositors, our next focus will be on creditors,” Hassan stated.

“Our preliminary assessment indicates total deposits of around N650 billion, with loans exceeding N700 billion.

“We are determined to recover these loans, empowered by the NDIC Act 2023, which provides a robust legal framework for debt recovery.

“We assure the public that we will use these powers to recover as much as possible, starting immediately.”

The CBN’s decision to revoke Heritage Bank’s license is part of a broader strategy to bolster public confidence in Nigeria’s banking system and maintain financial stability.

The liquidation process is being managed by the NDIC, which was appointed by the CBN as the liquidator under Section 12 (2) of BOFIA, 2020. 

NDIC To Repay Heritage Bank Customers Within One Week, Says MD

The NDIC has announced that the repayment of depositors at Heritage Bank will begin before the end of the week.

Hassan revealed that the NDIC has initiated the liquidation process following the CBN’s decision on Monday, which was aimed at safeguarding the stability of Nigeria’s financial system.

Hassan detailed that Heritage Bank’s total deposits stand at N650 billion, while its loan portfolio exceeds N700 billion. 

He emphasized that the NDIC is committed to ensuring the repayment of loans within the next six months. 

 

The repayment process will be structured to begin with the verification of all depositors, who will receive an insured benefit of up to N5 million. 

 

Depositors with balances exceeding N5 million will be paid from the proceeds of the bank’s asset sales.

 

Heritage Bank’s customer base comprises approximately 2.3 million depositors, with 99% holding balances below the N5 million threshold. 

 

The bank operates through 116 branches nationwide.

 

The CBN’s revocation of Heritage Bank’s licence was conducted under its mandate to promote a sound financial system in Nigeria. 

 

This decision was exercised in line with Section 12 of the Banks and Other Financial Institutions Act (BOFIA) 2020.

 

 Hakama Ali, the Acting Director of Corporate Communications at the CBN, stated that Heritage Bank breached Section 12 (1) of BOFIA, 2020. 

 

The bank’s board and management failed to improve its financial performance, posing a significant 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,” Ali explained.

 

The assurance of prompt payment by the NDIC offers a significant relief to the customers of Heritage Bank, who have been anxious following the licence revocation. Hassan reiterated that the NDIC’s primary focus is to protect depositors and maintain public confidence in the financial system.

 

“We are working tirelessly to ensure that all verified depositors receive their insured sums promptly. The process is designed to be efficient to minimize the inconvenience to customers during this transition period,” Hassan assured.

 

.. Customers Throng Headquarters Amid  Confusion

Meanwhile, on Wednesday, hundreds of customers of the recently liquidated Heritage Bank Plc gathered at the bank’s headquarters in Lagos, seeking information and reassurance about the status of their deposits.

A visit by PLATFORM TIMES revealed that security personnel were stationed at the bank’s entrance, preventing customers from entering the premises. This led to a tense atmosphere as anxious depositors demanded clarity on their financial situations.

Addressing the crowd through the gate, a bank official attempted to calm the situation, stating that payments had already begun for savings account holders and would continue until Friday. 

“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,” the official assured.

This announcement did little to soothe corporate account holders, who were told to return “next week.” Concerns were raised as BVN (Bank Verification Number) is typically linked to individual accounts, not corporate ones, leaving many business owners in a state of uncertainty.

The atmosphere outside the bank’s headquarters remained sombre as many customers declined to speak to the press. 

One customer, who gave a brief comment, said, “Mine is an entrepreneurship account,” reflecting the widespread concern among business owners.

Security personnel, while maintaining order, directed all inquiries to the Central Bank of Nigeria’s press release dated June 3, which announced the revocation of Heritage Bank’s license. 

 

 

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