BREAKING: NDIC Commences Payments to Heritage Bank Customers This Week

In a significant development, the Nigeria Deposit Insurance Corporation (NDIC) has announced the commencement of payments to depositors affected by the liquidation of Heritage Bank. The disbursement process, scheduled to begin this week, marks a crucial step in addressing the fallout from the bank’s closure.

During a press conference in Abuja on Wednesday, June 5, 2024, Mr. Bello Hassan, Managing Director of NDIC, made the announcement.

Hassan assured that the vast majority of the affected 2.3 million depositors, holding balances of N5 million or less, would promptly receive their full insured deposits. This proactive step aims to minimize the financial impact on the bank’s customers.

However, for the approximately 4,000 depositors whose account balances exceed the N5 million threshold, an initial payment of N5 million will be disbursed as part of the first phase of payments. This initiative underscores NDIC’s commitment to providing timely support to Heritage Bank’s depositors during this transitional period.

Mr. Hassan clarified that these depositors would receive further payments as the NDIC progresses with recovering the bank’s assets and outstanding loans.

Recall that the Central Bank of Nigeria (CBN), on Monday, announced the revocation of the operating licence of Heritage Bank Plc with immediate effect.

This announcement was issued in a statement by CBN acting Director, Corporate Communications, Mrs. Hakama Sidi Ali.

The apex bank said the move was in accordance with its mandate to promote a sound financial system in Nigeria and in exercise of its powers under Section 12 (1l of the Banks and Other Financial Act (BOFIA) 2020.

Meanwhile, a former deputy governor of the Central Bank of Nigeria, Kingsley Moghalu, on Wednesday, said the recent revocation of Heritage Bank Plc’s banking license by the apex bank should not “worry” anyone.

Moghalu described the revocation of the bank’s license as the chronicle of a death foretold, adding that the move was not surprising.

“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,” he said in a statement on X.

According to the former presidential aspirant, the apex bank’s license revocation was to protect depositors’ funds, and maintain confidence in the banking system.

“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,” he stated.

To Moghalu, 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.