Heritage Bank Depositors Protest as NDIC Speaks on Partial Reimbursement
- Depositors who held N5 million or more in funds at the now-closed Heritage Bank would only get a partial return, according to an announcement made by the NDIC
- The statement has drawn criticism from these depositors, who have described it as an unacceptable result that emphasizes how urgent the issue is
- They contend that it is dreadfully inadequate and represents severe financial constraints that threaten the public's confidence in the country's banking industry
Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
The Nigeria Deposit Insurance Corporation (NDIC) recently announced that depositors who had N5 million or more in funds at the now-defunct Heritage Bank would only receive a partial reimbursement. But depositors have criticized the announcement, calling it an unacceptable outcome that highlights the urgency of the situation.
Source: Getty Images
Ibrahim Elisha criticized the NDIC's pro-rata reimbursement plan over the weekend on behalf of the impacted depositors, claiming it is woefully insufficient and reflects serious funding shortages that jeopardize public trust in the nation's banking sector.
“Our current financial predicament requires swift and decisive intervention from the Presidency, the National Assembly, and the Central Bank of Nigeria (CBN),” Elisha said.
The organization claims that a recent press release, which the depositors say was prepared in response to media pressure, has revealed NDIC's inability to completely reimburse depositors, even after the liquidation of Heritage Bank's assets.
“For nine months, we have endured broken promises, uncertainty, and financial hardship,” Elisha added. “The NDIC’s current payment approach does not meet the needs of depositors and raises significant concerns about the stability and responsiveness of Nigeria’s financial regulatory institutions.”
The depositors cited past examples of CBN intervention to stabilize the financial sector, such as: First Bank's N460 billion allocation on behalf of Heritage Bank prior to its eventual revocation; Providus Bank and Unity Bank's merger support to maintain financial stability; a N700 billion lifeline given to Unity Bank with favorable terms for repayment; and the purchase of Keystone Bank shares to prevent institutional collapse.
“In light of these precedents, it is incomprehensible that the CBN would withhold similar urgent intervention in this case. The inaction risks destabilising the financial ecosystem and imposes needless hardship on depositors who trusted a supposedly stable institution,” Elisha noted.
Delays in disbursing bailout monies, the organization cautioned, could undermine investor confidence, erode public faith in financial institutions, and cast doubt on Nigeria's commitment to financial and economic stability internationally.
Source: UGC
“We urge the Presidency and National Assembly to act immediately by directing the CBN to release the necessary funds to the NDIC for full depositor reimbursement. Prolonged hesitation will deepen the crisis and inflict lasting reputational damage,” they stressed.
“Time is of the essence. The government must step in without delay to restore trust and protect vulnerable depositors. The consequences of inaction are far too grave. Immediate action is non-negotiable,” the statement concluded.
NDIC speaks on shutting down more banks
Legit.ng reported that Bello Hassan, the managing director of the Nigeria Deposit Insurance Corporation (NDIC), stated that the organization's goal is to continue liquidating failed banks without the need for court hearings and related litigation.
At a sensitization training for external solicitors in Abuja on Thursday, Hassan revealed the information.
The event was tagged, “Consolidating Collaborative Efforts in Mastering the Deposit Insurance Scheme and Bank Resolution.”
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Source: Legit.ng
