Heritage Bank Depositors With Over N5 Million Deposits to Get First Liquidation Payout in April

• Heritage Bank customers with more than N5 million in their accounts will start receiving partial refunds in April, according to NDIC
• The NDIC has been selling the bank’s assets and recovering loans to fund these payments, prioritizing depositors before creditors
• While customers with less than N5 million have already been paid, those with higher balances will soon receive their remaining funds

Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology, Banking and the Economy.

Heritage Bank customers who had more than N5 million in accounts before it closed will start getting part of their money back in April, according to the Nigeria Deposit Insurance Corporation (NDIC).

For months, these customers have been unsure about their funds after the bank suddenly shut down.

The decision comes after the bank’s depositors appealed to the National Assembly to intervene and advise the CBN to promptly pay all depositors in full.

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NDIC to start refunds for large depositors

The Central Bank of Nigeria (CBN) withdrew Heritage Bank’s licence on June 3, 2024, due to financial problems.

The NDIC was put in charge of handling the bank’s closure, following the Banks and Other Financial Institutions Act (BOFIA) 2020 and the NDIC Act 2023.

In a statement on Sunday, NDIC’s Acting Head of Communication and Public Affairs, Hawwau Gambo, said they had recovered some of the bank’s assets and would start paying the first batch of liquidation funds next month.

The statement read in part:

“With the considerable progress recorded in the asset realisation, the Corporation will declare the first tranche of liquidation dividends in April 2025, which will be paid to uninsured depositors on a pro-rata basis, in line with Section 72 of the NDIC Act 2023 on the priority of claims.”

Customers with less than N5 million in their accounts have already received their money, but those with higher amounts have only gotten the insured portion so far.

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NDIC moves to pay Heritage Bank depositors

The NDIC stated that the remaining money, beyond the N5 million already paid, will be given out as liquidation dividends based on its legal duties.

To make these payments, the corporation has started selling Heritage Bank’s properties and investments while also working hard to recover outstanding loans.

After Heritage Bank lost its banking licence, the NDIC quickly started the liquidation process. This included checking depositors' details and paying those covered by insurance.

However, some insured customers could not be reached due to issues like incomplete personal details, account restrictions, name mismatches, or not having another bank account.

According to Nigerian law, depositors must be paid first when a bank is liquidated. Other groups, such as creditors and shareholders, will only receive payments after all depositors have been fully refunded.

The NDIC also assured the public that Nigeria’s banking system remains safe.

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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.

Source: Legit.ng