Heritage Bank: After CBN’s Licence Revocation, NDIC Begins Verification

Following the revocation of the banking licence of Heritage Bank Plc by the Central Bank of Nigeria (CBN) the Nigeria Deposit Insurance Corporation (NDIC) said it has commenced the liquidation of the bank with immediate verification and payment of insured deposits to the bank’s depositors.

The NDIC in a statement issued on Monday said it commenced the liquidation process in pursuant to Section 12(2) of BOFIA, 2020, and in  accordance with Section 55 sub-section 1 & 2 of the NDIC Act 2023.

The CBN earlier yesterday announced the revocation of the bank’s licence with immediate effect.

The apex bank said the action became necessary due to the bank’s breach of Section 12 (1) of BOFIA, 2020. 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.

The withdrawal of operational licence is in accordance with 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, hereby

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 licence the next necessary step,” CBN’s spokeswoman, Hakama Ali said in a statement on Monday.

The CBN took the action to strengthen public confidence in the banking system and ensure that the soundness of our financial system is not impaired.

The CBN also said the NDIC has been appointed as the Liquidator of the bank in accordance with Section 12 (2) of BOFIA, 2020.

“We wish to assure the public that the Nigerian financial system remains on a solid footing. The action we are taking today reflects our continued commitment to take all necessary steps to ensure the safety and soundness of our financial system,” the statement reads in part.

Relatedly, to be verified, the NDIC said  “depositors of the bank that have alternate accounts within the industry will be paid up to the insured amount of N5 million per depositor using their Bank Verification Number (BVN) to locate their alternate account. While depositors with funds in excess of N5 million will be paid liquidation dividend upon realisation of the bank’s assets and recovery of debts owed to the bank.

For the verification and payment of depositors without alternate bank account, the NDIC, urged them to “visit the nearest branch of the bank with proof of account ownership, verifiable means of identification such as driver’s licence, permanent voter’s card, National Identity Card, together with their alternate account and Bank Verification Number (BVN) for the verification of their deposits and subsequent payment of insured sums.”

The statement by the Director Communication and Public Affairs of the NDIC Bashir A. Nuhu noted that claims can also be filed online by visiting the NDIC website claims page. Depositors are expected to download and fill the claims forms and upload the required documentation.

Creditors are also advised to visit the nearest branch of the bank to file their claims or via the online platform. Please note that the process of payment of creditors will commence immediately after all depositors have been paid.

The NDIC also urged debtors that are yet to complete the repayment of loans are advised to contact the Corporation’s Asset Management Department (AMD).

“The NDIC wishes to assure the entire banking public of its commitment to the continued safety of depositors’ funds in all licensed banks. As such, depositors are urged to continue their banking businesses without fear as banks whose licences have not been revoked remain safe and sound.

Meanwhile, the House of Representatives has assured depositors and stakeholders of Heritage Bank that it will carry out its constitutional oversight functions to ensure that revocation of the bank’s licence by the Central Bank of Nigeria (CBN) does not negatively impact them.

The House said, relevant House Committees on Banking Regulations; and Insurance will be up to their duty, thoroughly examine the circumstances surrounding the CBN decision and the subsequent steps taken by the Nigeria Deposit Insurance Corporation (NDIC).

Spokesperson/Chairman, House Committee on Media and Public Affairs, Hon. Akin Rotimi, who gave these assurances in a statement issued in Abuja on Monday, urged  all depositors and stakeholders to remain calm and be assured of our dedication to protecting their interests.

Rotimi said the priority of lawmakers was to safeguard the interests of all depositors and maintain the stability of the financial system.

He also said the Green Chamber will engage with the CBN, NDIC, and other relevant stakeholders to ensure a transparent and orderly resolution process, providing necessary support to mitigate any potential negative impact on the public.

The House Spokesperson urged the CBN and NDIC to establish clear channels of communication to allay the fears of the public and prevent any loss of trust in the country’s financial system, saying effective public engagement was crucial to maintaining confidence during the period.

He quoted the Chairman of the House Committee on Banking Regulations, Hon. Mohammed Bello El-Rufai said: “The Committee on Banking Regulations will closely monitor the liquidation process to ensure that the rights of depositors are protected and that the process adheres to the highest standards of transparency and accountability.”

According to Rotimi, the chairman of the House Committee on Insurance and Actuarial Matters, Hon. Ahmed Usman Jaha assured that the panel, “will work diligently to oversee that the NDIC executes its mandate effectively, ensuring the protection of depositors’ funds and maintaining confidence in the financial sector.

“The NDIC Act and the Banks and Other Financial Institutions Act (BOFIA) are clear in their provisions that depositors’ funds are insured and protected.”