Heritage Bank: NDIC Goes After N700bn Loan Defaulters, Lists 2.3m Depositors

Heritage Bank: NDIC goes after N700bn loan defaulters, lists 2.3m depositors
6th June 2024

The Nigeria Deposit Insurance Corporation has announced that it will pay out insured deposits to depositors of the defunct Heritage Bank who have N5m or less in their accounts.

NDIC, who was appointed liquidator of the bank by the Central Bank of Nigeria said that it would ensure the payment is done within one week.

Managing Director of the NDIC, Bello Hassan, at a press conference held on Wednesday in Abuja, revealed that customers whose funds were N5m or less were 99 per cent of the 2.3 million depositors of the bank.

Hassan said, “Our primary objective is to protect depositors and maintain financial system stability. We will start by paying depositors the maximum insured amount of N5m, leveraging the Bank Verification Number facility.”

“Our focus is on depositors and creditors, with depositors taking priority. We will start by paying depositors the maximum insured amount of N5m. Depositors with alternate bank accounts can visit any NDIC branch for payment, while those without can use the NDIC website to claim their insured amount.”

He also noted that the NDIC would later focus on paying uninsured deposits and creditors, from proceeds of the liquidation of the bank’s assets.

With about N650bn in deposits and N700bn in loans, the NDIC aims to recover as much as possible, empowered by the NDIC Act 2023. Hassan assured the public that the agency would leverage its powers to achieve this goal efficiently.

“After paying depositors, we will move on to creditors. Our preliminary assessment shows total deposits of around N650bn, with loans exceeding N700bn.

“We aim to recover these loans, empowered by the NDIC Act 2023, which provides a sufficient legal framework for debt recovery. We assure the public that we will leverage these powers to recover as much as possible, starting immediately,” he said.

In a statement signed by the Acting Director of Corporate Communication, Sidi Ali, on Monday, the CBN announced the revocation of the licence of Heritage Bank citing a breach of its rules.

The regulator said, “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.

“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.”

Meanwhile, customers of the liquidated Heritage Bank gathered at the bank’s headquarters in Lagos on Wednesday, to seek answers on how to get their deposits back.

According to the News Agency of Nigeria, guards prevented customers from entering the premises.

Addressing the customers through the gate, an official informed them that payments had 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 them.

However, corporate account holders were advised to return “next week,” leading to concerns among some who noted that BVN is typically associated with individual accounts, not companies.

The atmosphere remained sombre as customers declined interviews with NAN.

A customer simply stated, “Mine is an entrepreneurship account.”

Efforts by a NAN correspondent to gain entrance were thwarted by security personnel, who referred to the Central Bank of Nigeria’s press release dated June 3, announcing the revocation of the bank’s license, as the response to all inquiries.