Why some Heritage Bank depositors are yet to be refunded —NDIC Boss

Financial Markets

The Managing Director, of the Nigeria Deposit Insurance Corporation, NDIC, Mr. Bello Hassan, yesterday disclosed that some of the Insured Depositors of the defunct Heritage Bank Limited were yet to be paid due to failure to provide necessary information of alternative bank accounts.

He spoke at the opening of the 2024 NDIC workshop for Businesses Editors and members of the Finance Correspondents Association of Nigeria (FICAN) in Lagos.

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Recall that Heritage Bank’s operating license was withdrawn by the Central Bank of Nigeria, CBN, on June 02, 2024 following which its liquidation commenced with the refund of insured depositors funds by the NDIC.

Giving update on this process, Hassan stated: “For the depositors of Heritage Bank, we have paid substantially all the insured depositors. The only group of insured depositors that we have not paid are those with no alternate accounts in other banks, and they have not come forward to also provide those alternate accounts so that we can pay them.

“We have also not paid insured depositors whose account is on post-no-debit, PND, order, either by order of court or regulatory agencies due to issues around fraud or know-your customer, KYC, requirements”. Hassan also said since the Corporation has paid the insured amount considerably, it is now making efforts to recover the assets of the collapsed bank in terms of physical assets and the debts, so that it can pay the uninsured depositors in form of liquidation dividend.

Speaking further of Heritage Bank, the NDIC boss said that the success achieved in payment of insured deposits was made possible by the Bank Verification Numbers (BVN) of the customers.

His words, “This was achieved using Bank Verification Numbers (BVN) as a unique identifier to locate depositors’ alternate accounts in other banks without the need to fill forms or visit the NDIC offices. “This innovative approach has indeed, enabled the payment of 84.98% of depositors with BVN linked accounts to date.

“The prompt payment of depositors, coming at a time when the Corporation had also recently increased the deposit insurance coverage from N500,000 to N5 million in Deposit Money Banks, significantly cushioned the negative impact of bank failure, especially during the current challenging economic climate.

“Having largely reimbursed depositors their insured deposits, the Corporation is committed to ensuring that depositors with balances exceeding N5 million are also paid the balance of their deposits.“These uninsured deposits represent a significant portion of the total deposits in Heritage Bank. In this regard, the Corporation is already working assiduously to ensure that, all depositors with amounts in excess of the maximum insured amount of N5 million are paid through liquidation dividends from the realisation of the defunct bank’s assets and recovery of debts.”