…Deploys 400 staff to bank branches for payment of N5m insured deposit
Liquidated Heritage Bank Plc whose operating licence was revoked Monday by the Central Bank of Nigeria ( CBN), and passed over to the Nigeria Deposit Insurance Corporation (NDIC) for insured deposit payment has a total deposit of N650 billion and loan exposure of over 700 billion, NDIC Managing Director/ Chief Executive Mr Hassan Bello confirmed.
Briefing the media on Wednesday on the preparation by the Corporation to commence with immediate effect, the mandatory payment of N5 million insured deposit to the bank’s 2.3 million account holders across the 116 branches and regional offices, Hassan said the Corporation has deployed 400 staff to commence verification and payment immediately. He said every depositor will be paid, adding the N700 billion debt will be recovered in full.
” At this early stage of the liquidation process, what we are doing is to determine the claimants of the bank. These claimants are of two categories: depositors and creditors. And the law states that there is a priority in terms of payment to depositors.
“It takes priority before all other claimants. We are going to start with depositors before proceeding to creditors. For depositors, we are lucky to have the BVN facilities and we are leveraging on it to identify alternate bank accounts for those depositors of Heritage Bank on liquidation.
“For depositors who have accounts only with the Heritage Bank, they will have to visit the nearest branch to be verified and identified by our staff on the ground. If they are unable to do that, they can also do so by visiting the NDIC website .
“We are going to pay the insured amount now. This insured amount is going to be paid from the deposit insurance funds that have built up over time from premiums being collected from the institutions on an annual basis.
“The maximum amount is N5 million per depositor, so whatever amount less than N5 million will be paid in full now; and for amounts higher than N5 million, we will pay N5 million now, because that is the maximum insured amount. After this, the next process is for us to realise all the assets both physical and the loans the bank granted while it was in operation.
“When we realise those assets, we are now going to declare what we call a liquidation dividend and that’s what we’ll pay to the uninsured portion of the deposit when we finish, we move to the creditors if there’s surplus from the realisation of those assets”
“From our preliminary assessment, the total deposit is around N650 billion while the loans are well above 700 billion. So we believe If we are able to recover all the loans, no depositor is going to lose their money and creditors as well”.
Bello said the new NDIC Act 2023 gave the corporation sufficient power to recover debt to the last kobo.
” I believe this time around, it’s going to be different. Before now, one of the greatest challenges we faced was recovery because of insufficient legal framework. The new Act empowers the corporation to be able to recover those loans that were granted by banks in liquidation. We must thank the legislature for passing the NDIC Act 2023.
It has really sufficiently empowered NDIC to be able to recover the debts that were granted by the banks in liquidation and I want to assure the banking public that we are going to leverage those powers to be able to recover as much as possible and we are starting this process as quickly as possible because there’s really no time to waste .
“Those depositors are waiting to realise their deposits. We believe by doing so it will go a long way in engendering confidence in the system thereby promoting stability”, he said.
“There are about 2.3 million depositors in Heritage Bank, 99.9% of their balance is less than N5 million; only about 4000 depositors have more than N5 million and above. We are going to take care of all of them. We will pay them the insured amount then the uninsured will proceed immediately after we start recovery.
“We are also using this medium to call on the creditors of the bank to come forward and file their claims because immediately we finish with the depositors, the next set of claimants we are going to face is the creditors so we will settle them accordingly.
Asked about the fraction of insider abuse that constituted bank loans, Bello said that would only be determined by corporation staff despatched to comb bank’s book. However, he said every penny loaned out will be recovered.
On the fate of banks’ employees, he said the corporation will work with a few of them temporarily, to assist NDIC in gathering the necessary information and they will be paid. Others, he said will be let go.
“While we are there, the key staff we need to help us gather information, we will retain and pay them, others have to leave their job. Unfortunately, that’s a liquidation rule”.
“The Central Bank on Monday revoked the licence of Heritage Bank. The apex bank in addition, confirmed it paid off First Bank
of Nigeria Ltd’s total exposure to Heritage Bank, amounting to N460 billion, just before it revoked the bank’s licence .
