Bello Hassan, the Managing Director and CEO of the Nigeria Deposit Insurance Corporation (NDIC), recently provided assurances regarding the safety of customer funds in the failed Heritage Bank during the 2024 NDIC Editors Forum in Lagos. This event highlighted the critical role of the NDIC in protecting depositors’ interests, especially following Heritage Bank’s closure after the Central Bank of Nigeria (CBN) revoked its license on June 3, 2024. Hassan, represented by Executive Director Mustapha Ibrahim, emphasized the NDIC’s responsibilities under the Banks and Other Financial Institutions Act (BOFIA) 2020 and the NDIC Act 2023, which included being appointed as the liquidator to manage the orderly resolution of the bank and facilitate the payment of depositors and other claimants.
In light of the bank’s recent closure, Hassan noted the NDIC’s swift actions to begin reimbursing depositors. Remarkably, insured deposits amounting to N5 million per depositor were initiated within just four days of the bank’s closure. By leveraging Bank Verification Numbers (BVN) as a means to identify depositors and access alternate accounts in other banks, the NDIC streamlined the reimbursement process, eliminating the need for depositors to fill out forms or visit offices in person. This efficient method allowed a significant number of depositors with BVN-linked accounts to receive immediate compensation.
One of the critical updates shared at the Forum was the recent increase in deposit insurance coverage from N500,000 to N5 million. This change minimizes the detrimental effects of the bank’s failure on affected depositors, aligning the NDIC’s practices with international standards, particularly the International Association of Deposit Insurers Core Principle 15, which underscores the necessity of timely payouts to depositors of failed banks. The prompt actions of the NDIC reflect its commitment to safeguarding depositors’ interests and maintaining public confidence in Nigeria’s banking system.
In addition to reimbursing insured deposits, Hassan reassured depositors with balances exceeding N5 million that the NDIC is dedicated to ensuring they also receive payment for their uninsured balances. A significant portion of the total deposits at Heritage Bank fell into this category. To facilitate this, the NDIC is actively working on recovering debts and liquidating the assets of Heritage Bank to provide a return to these depositors. Through diligent efforts, the NDIC aims to maximize the recovery of investments and physical assets from the defunct bank.
Furthermore, Hassan addressed the concerns of creditors of the failed bank, informing them that they would receive payments only after all depositors had been fully reimbursed. This prioritization aligns with the NDIC’s mandate of protecting depositors first and maintaining order in the financial framework during such occurrences, which is pivotal in preserving the trust of the public in the banking system.
The workshop also served as a vital platform for discussions around strengthening Nigeria’s financial safety net, particularly the role deposit insurance plays. Bashir Nuhu, the Director of Communication and Public Affairs at the NDIC, highlighted that the Forum provided valuable opportunities for participants to gain insights into the NDIC’s operations and contribution to enhancing financial stability in Nigeria. Through such engagements, the NDIC seeks to foster transparency and educate the public about its crucial role in the financial system.
