NDIC Goes After Heritage Bank Loan Defaulters Owing N700 Billion After CBN License Revocation
- The NDIC has announced its intention to recover N700 billion in loans from Heritage Bank debtors and refund customers their funds
- The CBN appointed the corporation as a liquidator to help settle depositors of the recently liquidated bank
- It stated that the NDIC Act 2023 empowers it to recover as much of loans as possible to maintain financial stability
Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the Stock Market.
The Nigeria Deposit Insurance Corporation (NDIC) has revealed plans to pursue Heritage Bank's loan defaulters, who collectively owe the bank N700 billion.
NDIC's Managing Director, Bello Hassan, made this announcement during a press conference in Abuja on Wednesday, June 5, 2024.
Source: UGC
As the liquidator appointed by the Central Bank of Nigeria, the NDIC also assured that it would disburse insured deposits to depositors of the now-defunct Heritage Bank, specifically those with accounts holding N5 million or less.
NDIC commences loan recovery
Hassan stated that Heritage Bank had issued loans totalling approximately N700 billion, and the NDIC is determined to recover as much of this amount as possible under the authority of the NDIC Act 2023.
According to Punch, the NDIC boss assured the public that the agency would effectively utilize its powers to accomplish this objective.
He said:
“After paying depositors, we will move on to creditors. Our preliminary assessment shows total deposits of around N650bn, with loans exceeding N700bn.
“We aim to recover these loans, empowered by the NDIC Act 2023, which provides a sufficient legal framework for debt recovery. We assure the public that we will leverage these powers to recover as much as possible, starting immediately.”
It is worth noting that on Monday, June 3, 2024, the CBN announced the revocation of Heritage Bank's license due to regulatory violations.
This decision has led to significant discontent among the bank's customers, who have flocked to its headquarters in Lagos to find out how they can retrieve their deposits.
Speaking on the NDIC's plan to go after Heritage Bank's loan defaulters, Danladi Umar it is the right way to go
He told Legit.ng:
"Ensuring that defaulters are held accountable helps recover lost funds, deters future non-compliance, and maintains trust in the banking system.
"In the case of Heritage Bank, the default loans need to be recouped for the bank, in collaboration with the liquidator, the NDIC, to be able to refund customers their money."
CBN denies plan to shut more banks
In related news, Legit.ng reported that the CBN had clarified that it has no intention of revoking the licenses of Unity Bank, Polaris Bank, or Keystone Bank.
It should be recalled that soon after Heritage Bank's license was revoked, a particular news medium reported that the aforementioned banks were going to experience a similar fate.
However, the apex bank dismissed the report in a statement posted on its social media platforms, insisting that the news was false.
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Source: Legit.ng
