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Heritage Bank: NIDC verifying depositors for payment of insured benefits, says CEO

*Bello Hassan, Managing Director of the Nigeria Deposit Insurance Corporation, discloses all liquidated Heritage Bank’s depositors are currently being verified for payment of N5 million insured benefit while depositors with insured deposits above the threshold will be repaid after sale of the bank’s assets

Isola Moses | ConsumerConnect

Sequel to the Central Bank of Nigeria’s recent liquidation of the commercial bank, the Nigerian Deposit Insurance Corporation (NDIC) has disclosed the payment of depositors at Heritage Bank Plc will commence before the end of the week.

Bello Hassan, Managing Director of NDIC, noted this development during a briefing on the bank’s liquidation process Wednesday, June 5, 2024.

ConsumerConnect reports the NDIC said it commenced the liquidation of Heritage Bank, following the CBN’s revocation of its operating licence Monday, June 3.

The CBN as the banking sector regulator had appointed the NDIC as the liquidator of the bank under Section 12 (2) of BOFIA, 2020.

Hassan also revealed the total bank deposits at Heritage Bank prior to liquidation stood at N650 billion, while its loan portfolio was estimated over N700 billion.

The NDIC, he stated, looks forward to ensuring the loan repayment within the next six months.

The Managing Director further stressed that all depositors are currently being verified for onward payment of insured benefit of five N5 million whereas depositors with insured deposits above N5 million Naira will be repaid after sale of the bank’s.

According to Hassan, the Corporation has put the bank’s total depositors at 2.3 million with 99 percent of them having total balances less than N5  million Naira.

There are about 116 branches of heritage banks across the country, stated he.

It is recalled the CBN, Monday, June 3 had revoked the Heritage Bank operating licence under its mandate to promote a sound financial system in Nigeria, and in exercise of its powers under Section 12 of the Banks and Other Financial Act (BOFIA) 2020.

Mrs. Hakama Ali, Acting Director of Corporate Communications at CBN, in a statement, emphasised the liquidated commerical bank had breached Section 12 (1) of BOFIA, 2020.

Ali also explained the Board and Management of the bank had not been able to improve its financial performance, a situation which constitutes a threat to financial stability in the country’s banking ecosystem.

The CBN stated: “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.”

Consequently, the CBN said it took action to strengthen public confidence in the banking system, and ensure that the soundness of the financial system is not impaired.

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