Heritage Bank: Why Some Depositors Are Yet To Be Refunded

The Managing Director of the Nigeria Deposit Insurance Corporation (NDIC), has finally spoken on why some Heritage Bank depositors are yet to be refunded.

Why Some Heritage Bank Depositors Are Yet To Be Refunded

Mr. Bello Hassan, the Managing Director of the Nigeria Deposit Insurance Corporation (NDIC), announced yesterday that some insured depositors of the now-defunct Heritage Bank Limited have not yet received their payments because they have not provided the required details for alternative bank accounts.

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He made this statement during the opening of the 2024 NDIC workshop for business editors and members of the Finance Correspondents Association of Nigeria (FICAN) in Lagos.

Recall that the Central Bank of Nigeria (CBN) revoked Heritage Bank's operating license on June 2, 2024, leading to its liquidation and the refund of insured depositors' funds by the NDIC.

Updating 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.

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He added that, having substantially reimbursed insured depositors, the NDIC is now focusing on recovering the assets of the collapsed bank, including physical assets and debts, to pay uninsured depositors through liquidation dividends.

Regarding Heritage Bank, the NDIC chief noted that the successful payment of insured deposits was facilitated by the customers’ Bank Verification Numbers (BVN).

He explained:

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 realization of the defunct bank’s assets and recovery of debts.

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The MD stated that the Corporation has already begun the process of recovering debts and realizing investments and physical assets of the defunct bank to ensure the prompt payment of uninsured deposits.

He also mentioned that the NDIC's responsibilities include addressing the creditors of the defunct bank, who will be paid after all depositors have been fully reimbursed.

He again stated:

This orderly process, based on asset realization and priority of claims, is essential in maintaining public trust in the banking system and promoting financial stability. The handling of the Heritage Bank liquidation illustrates the broader role of the NDIC in ensuring that even in times of financial disruption, depositors can be rest assured that their funds are protected.