NDIC Vows to Protect Depositors, Pays 84.98% of Heritage Bank Depositors
Oru Leonard
The Nigeria Deposit Insurance Corporation (NDIC) has reaffirmed its commitment to protecting depositors, particularly the most vulnerable, and ensuring the stability of the financial system. Managing Director/CEO Bello Hassan made this pledge at the 2024 NDIC Workshop for Business Editors and Finance Correspondents Association of Nigeria (FICAN) in Lagos.
Hassan highlighted the NDIC’s critical role in safeguarding depositors, citing the recent closure of Heritage Bank as an example. The NDIC acted as liquidator, managing the bank’s orderly resolution and overseeing payment to depositors and claimants . Within four days of the bank’s closure, the NDIC began reimbursing insured deposits up to N5 million per depositor using Bank Verification Numbers (BVN) to locate alternate accounts.
To date, 84.98% of depositors with BVN-linked accounts have received payment. The NDIC has also increased deposit insurance coverage from N500,000 to N5 million in Deposit Money Banks, providing a cushion for depositors during challenging economic times. This achievement aligns with the International Association of Deposit Insurers (IADI) Core Principle 15, emphasizing timely payouts to depositors of failed banks.
The NDIC is committed to paying depositors with balances exceeding N5 million through liquidation dividends from the realization of Heritage Bank’s assets and debt recovery. Creditors will receive payments after all depositors have been fully reimbursed, maintaining public trust and financial stability.
Hassan emphasized the importance of public confidence in the financial system and the role of deposit insurance in preventing bank runs during uncertainty. The NDIC’s efforts have been instrumental in promoting stability and protecting depositors.
Key Takeaways:
– NDIC’s Role: Protecting depositors and ensuring financial stability
– Heritage Bank Closure: NDIC acted as liquidator, reimbursing 84.98% of depositors with BVN-linked accounts
– Increased Deposit Insurance Coverage: From N500,000 to N5 million in Deposit Money Banks
– Payment to Creditors: After all depositors have been fully reimbursed
– Public Trust: Maintaining confidence in the banking system through timely payouts and transparent processes
