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The Nigeria Deposit Insurance Corporation, NDIC, yesterday said it has started payment to depositors with the liquidated Heritage Bank. The Corporation stated that only those having N5 million and below in their accounts will begin to receive their money.

However, depositors with more than N5 million will have to wait longer for their balance.

According to NDIC, this class of depositors will wait until assets of the liquidated bank are disposed of and money generated. 

Recall that the Central Bank of Nigeria, CBN, yesterday, Monday, revoked the operating licence of Heritage Bank.

This is because, according to the apex bank, Heritage failed in its obligations.

According to statement by CBN spokesperson Hakama Sidi-Ali said: “The bank’s Board and Management failed to improve its financial performance. Therefore, the bank posed a risk to the financial stability of the country. Despite various supervisory measures taken by the CBN to help the bank recover, Heritage Bank continued to struggle without any reasonable prospects of recovery”.

NDIC Director of Communication and Public Affairs Bashir Nuhu, confirmed that payments to depositors will begin on Monday.

 Nuhu said Heritage Bank customers with alternate accounts in other banks will be paid up to the insured amount of N5 million per depositor.

He said, “Payments will be facilitated using the depositors’ Bank Verification Numbers (BVN) to identify their alternate accounts. Those with deposits exceeding N5 million will receive additional payments, known as liquidation dividends. This is after the bank’s assets are sold and debts are recovered.

“To facilitate this process, the NDIC and the Central Bank of Nigeria, CBN, are working this week to identify depositors with alternate bank accounts. Ensuring they receive their funds promptly starting on Monday.

Nuhu, however, emphasized that depositors with verified BVNs and alternate bank accounts do not need to visit their banks or the NDIC to receive their payments.

“For depositors without alternate bank accounts,” Nuhu advised them to visit the nearest branch of Heritage Bank with proof of account ownership. This includes a verifiable means of identification (such as a driver’s license, permanent voter card. Or National Identity Card), and their BVN.

“They can also file their claims online by visiting the NDIC website. Downloading the claims form and upload the required documents.

“Creditors of Heritage Bank are also advised to visit the nearest bank branch. Or use the online platform to file their claims. Payments to creditors will begin immediately after all depositors have been paid.

“Debtors of Heritage Bank who have not yet completed their loan repayments have been instructed to contact the NDIC’s Asset Management Department (AMD). They are also to visit the NDIC website to fill out the required documents. Assets recovered from these debtors will be used to pay depositors and creditors of Heritage Bank.

“The NDIC reassured the banking public of its commitment to protecting depositors’ funds in all licensed banks. Depositors are encouraged to continue their banking activities without fear, as banks with valid licenses remain safe and sound.

Recall that last month, the NDIC announced an increase in deposit coverage from N500,000 to N5,000,000, now fully covering 98.98 percent of depositors.

According to NDIC’s Managing Director Bello Hassan, the corporation collects premiums annually to fund the deposit insurance system. He maintained that there are over N2 trillion in these funds.

He said, “This increase in insured deposit coverage was as a result of factors such as inflation, exchange rates, and per capita GDP. Ensuring swift payment to depositors, often within seven days has become a global best practice.

Hassan, however, clarified that the increase in coverage will not necessarily lead to higher premiums for banks.

He informed that the NDIC has moved to a risk-based premium framework, where banks managing risks effectively will pay the base rate of 35 basis points. While those with higher risk profiles could face premiums up to 65 basis points.

Hassan stated that the NDIC’s actions is meant to ensure the stability and confidence in Nigeria’s banking system. And also to provide a safety net for depositors and maintaining public trust in the financial sector.

source: The Nation

 

 

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