Heritage Bank: FG Opens Online Platform For Depositors To Retrieve Funds From Defunct Bank

The Nigerian Deposit Insurance Corporation (NDIC) has started the liquidation process of Heritage Bank, following the Central Bank of Nigeria’s (CBN) decision to revoke the bank’s licence.

The CBN made this announcement on Monday, citing the bank’s financial instability and breach of regulatory provisions.

In a statement, Sidi Ali, the Acting Director of Corporate Communication at CBN, explained the decision. “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,” Ali stated.

The NDIC, now appointed as the liquidator, has set up a platform for depositors to retrieve their funds. Bashir Nuhu, Director of Communication & Public Affairs at NDIC, detailed the process.

“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 the realization of the bank’s assets and recovery of debts owed to the bank,” Nuhu explained.

READ ALSO: Why CBN Revoked Heritage Bank’s Licence 

For depositors without alternate bank accounts, Nuhu advised, “Visit the nearest branch of the bank with proof of account ownership, a verifiable means of identification such as a driver’s license, permanent voter’s card, or National Identity Card, together with your Bank Verification Number for the verification of your deposits and subsequent payment of insured sums. Alternatively, you can file an online claim on the NDIC website.”

The NDIC has assured the banking public of its commitment to safeguarding depositors’ funds. “Depositors are urged to continue their banking businesses without fear, as banks whose licences have not been revoked remain safe and sound,” the statement concluded.

The Bank Customers Association of Nigeria has endorsed the CBN’s decision. Dr. Uju Ogubunka, President of the association, commented, “The CBN cannot just take action without considering the implications. If a bank has been run aground, it has implications for others. The CBN would have considered the position of the bank and, if irredeemable, taken the necessary steps within the law.”

Ogubunka highlighted the potential inconveniences for customers. “Bank customers, except those indebted to the bank, will be the most affected. Those with credit in their accounts will have to wait until NDIC takes over and repays them,” he noted.

Professor of Capital Market, Uche Uwaleke, supported the revocation. “The revocation of the license of Heritage Bank by the CBN is a step in the right direction. This proactive step by the CBN is in the overall interest of financial system stability. Efforts should be made to protect the depositors as well as the interests of employees using liquidation dividends,” Uwaleke said.

The House of Representatives has also committed to engaging with relevant stakeholders to ensure the safety of depositors’ funds. Akin Rotimi, spokesman for the House, stated, “We assure the public, particularly depositors and stakeholders of Heritage Bank, that the House is committed to carrying out its constitutional oversight functions to ensure this development does not negatively impact Nigerians.”

The House Committees on Banking Regulations and Insurance will be examining the circumstances surrounding the decision and the subsequent steps taken by the NDIC. Mohammed El-Rufai, Chairman of the House Committee on Banking Regulations, remarked, “The committee will closely monitor the liquidation process to ensure that the rights of depositors are protected and that the process adheres to the highest standards of transparency and accountability.”

Ahmed Jaha, Chairman of the Committee on Insurance and Actuarial Matters, added, “We will work diligently to oversee that the NDIC executes its mandate effectively, ensuring the protection of depositors’ funds and maintaining confidence in the financial sector.”

As the NDIC moves forward with the liquidation process, depositors and creditors of Heritage Bank are encouraged to follow the outlined steps to ensure they retrieve their funds efficiently.