NDIC Begins Payment To Heritage Bank Customers Amid Concerns

The Nigeria Deposit Insurance Corporation (NDIC) has announced the disbursement of insured deposits to depositors of the now-liquidated Heritage Bank.

This announcement follows the Central Bank of Nigeria’s (CBN) decision to revoke Heritage Bank’s operating licence.

The apex bank announced in a statement on Monday by its acting Director of the Corporate Communication Department, Sidi Ali, that the decision was made because the bank failed to improve its financial performance, and posed a threat to financial stability.

The NDIC’s Managing Director, Bello Hassan, shared this information during an ongoing press conference in Abuja.

Hassan assured that a vast majority of the affected depositors, who have balances of N5 million or less, will promptly receive their full insured deposits. This measure aims to significantly minimize the impact on the bank’s clientele.

However, for the approximately 4,000 depositors whose account balances exceed the N5 million threshold, an initial payout of N5 million will be disbursed as part of the first phase of payments.

Hassan clarified that these depositors will receive further payments as the NDIC continues to recover the bank’s assets and outstanding loans.

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This assurance comes after the Central Bank of Nigeria (CBN) decided to revoke Heritage Bank’s operating license.

The CBN, in a statement released on Monday, June 3, stated that this action was necessary to maintain a stable financial system in Nigeria, in accordance with its authority under Section 12 of the Banks and Other Financial Act (BOFIA) 2020.

The bank’s violation of Section 12 (1) of BOFIA, 2020, and its inability to improve its financial performance were cited as reasons for the license revocation.

HERITAGE BANK LICENCE REVOCATION NOT SURPRISING – SAYS MOGHALU

Kingsley Moghalu, who previously served as a deputy governor at the Central Bank of Nigeria, has reassured Nigerians that the recent decision to cancel Heritage Bank Plc’s banking license by the top bank should not cause concern.

Moghalu viewed the bank’s license cancellation as the fulfilment of a prophecy, noting that such an action was expected.

The former presidential candidate believes that the decision to revoke the bank’s license was made to safeguard the money of the bank’s customers and preserve trust in the banking sector.

“The revocation of the banking license of Heritage Bank by @cenbank is the chronicle of a death foretold. In other words, it’s not surprising.

“I don’t think it should worry anyone, nor does it mean the financial system isn’t sound. Banks are businesses, even if very special and thus heavily regulated ones. A bank that is badly run should not have a lifetime guarantee. The important thing is to protect depositors’ funds,” Moghalu said in a statement on his official X handle on Wednesday.

Moghalu stressed that the Asset Management Corporation of Nigeria was established to ensure systemic financial stability and guard against bank failure.

“What we did in 2010 when we created @AmconNg was to ensure SYSTEMIC financial stability. We made sure no bank failed then to ensure systemic stability because of the unique situation of the global financial crisis. But over the long term, I never subscribed to a view that no bank, no matter how badly run, should ever fail. That would be a wrong approach to financial regulation,” he added.