The Nigeria Deposit Insurance Corporation (NDIC) has announced that uninsured depositors of the defunct Heritage Bank can expect to receive their first tranche of liquidation dividends by April 2025. This significant development marks a crucial step in the ongoing process following the Central Bank of Nigeria’s (CBN) revocation of Heritage Bank’s operating license on June 3, 2024.
According to a press statement released by Hawwau Gambo, Acting Head of Communication & Public Affairs of the NDIC, the payments will be made on a pro-rata basis, adhering strictly to Section 72 of the NDIC Act 2023. This legislation prioritizes the settlement of deposit liabilities over other obligations when a financial institution fails.
“With the considerable progress recorded in the asset realization, the Corporation will declare the first tranche of liquidation dividends in April 2025, which will be paid to uninsured depositors on a pro-rata basis, in line with Section 72 of the NDIC Act 2023 on the priority of claims,” the statement read.
Since the CBN’s revocation, the NDIC has been acting as the liquidator, a role assigned under Section 12(2) of the Banks and Other Financial Institutions Act (BOFIA) 2020 and Section 55(1 & 2) of the NDIC Act 2023. This responsibility includes verifying and paying insured deposits, which are capped at N5 million per depositor.
While the NDIC has made substantial progress in reimbursing insured deposits, challenges remain. Some depositors are yet to receive their insured amounts due to issues like the absence of a Bank Verification Number (BVN) or alternate bank accounts, post-no-debit (PND) restrictions, Know Your Customer (KYC) limitations, and mismatches in account names.
Furthermore, some depositors who have received payments may be unaware due to the lack of mobile transaction alerts. The NDIC has urged these individuals to check their alternate bank accounts.
For those with balances exceeding N5 million, the insured portion has been paid, and the remaining balance will be disbursed as liquidation dividends as the NDIC realizes Heritage Bank’s assets. This process involves the sale of physical assets and the recovery of risk assets.
The NDIC is actively advertising the asset disposal process through various channels, including its official website, social media, national newspapers, and radio and television broadcasts, ensuring transparency and compliance.
I understand that this situation can be stressful for many, and the NDIC has reiterated its commitment to protecting depositors’ funds and ensuring a smooth liquidation process. The Corporation also aims to maintain public confidence in the banking sector, emphasizing that all other licensed banks remain safe and sound.
The NDIC has encouraged affected depositors to proactively verify their account details and resolve any discrepancies that may hinder payment. This proactive approach is crucial in expediting the process and ensuring that all eligible depositors receive their entitlements.
The Corporation’s dedication to adhering to Section 72 of the NDIC Act 2023 underscores its commitment to prioritizing depositors’ interests. Only after all depositors have been reimbursed will other creditors and shareholders be considered.
By prioritizing transparency and efficiency, the NDIC is working to minimize delays and provide clarity to those affected by the Heritage Bank liquidation.
