NDIC to begin refunds to Heritage bank customers next week

The Nigerian Deposit Insurance Corporation (NDIC) says the payment of depositors in Heritage Bank will commence in one week.

The Managing Director of NDIC, Bello Hassan, disclosed this in a briefing on the liquidation of the bank in Abuja on Wednesday.

Hassan said the total bank deposits at Heritage Bank stand at N650bn while its loan portfolio stands at over N700bn, according to Channelstv.

He stated that the NDIC looks forward to ensuring the loan repayment within the next six months.

The NDIC MD said, “All depositors are currently being verified for onward payment of insured benefit of five N5m while depositors with insured deposits above N5m naira will be paid upon the sale of the assets of the bank.

“The NDIC put the total depositors at the bank at N2.3m with 99 per cent of them having total balances less than five million naira.”

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

The assurance of the payment by the NDIC will give hope to the customers of Heritage Bank who have been in packing mode following the revocation of the bank’s licence.

The banking licence of Heritage Bank was revoked by the Central Bank of Nigeria (CBN) on Monday.

According to the CBN, the move was 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.

According to a statement by the Ag. Director, Corporate Communications of the Appex bank, Hakama Ali, the bank had breached Section 12 (1) of BOFIA, 2020.

Ali added that 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.

It said “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.

The apex bank then appointed the Nigeria Deposit Insurance Corporation (NDIC) as the liquidator of the bank under Section 12 (2) of BOFIA, 2020.