THE Nigeria Deposit Insurance Corporation (NDIC) has explained the delay of payment to 17.6 per cent of the defunct Heritage Bank’s depositors, citing a challenge in their accounts verification.

The NDIC disclosed this in a statement on Sunday, August 12, by its spokesperson, Bashir Nuhu.

“It is instructive to state that, the remaining 17.64 per cent of the insured deposits yet to be paid were largely depositors whose accounts have post no debits (PND) instructions or have no BVN. Others are those with no alternative accounts in other banks or accounts with KYC limit on the maximum lodgment per day and are yet to come forward for verification,” NDIC said.

Heritage Bank’s liquidation came after the Central Bank of Nigeria (CBN) accepted that the bank had violated Section 12 (1) of the Banks and Other Financial Act (BOFIA) 2020.

The apex bank said specifically that the Heritage Bank’s board and management failed to improve the bank’s financial performance, “a situation which constituted a threat to financial stability.”

It further revealed that the withdrawal of the Heritage Bank’s licence followed a period after various supervisory steps prescribed by the CBN to rescue the bank from liquidation proved abortive.

On Monday, June 3, however, CBN announced the revocation of the Heritage Bank’s operating licence and directed the NDIC to liquidate the bank and pay depositors their funds.

To pay off the remaining depositors, NDIC said it is making attempts to contact the remaining depositors yet to receive their funds through telephone calls and text messages to the depositors to complete their verification process.

It stressed that it is offering both online verification options and the possibility of depositors visiting the NDIC offices in person to resolve outstanding issues.

NDIC added that it has paid about 82.36 per cent of the total insured deposit to date and the payment process was initiated using Bank Verification Numbers (BVN) to transfer up to N5 million (£5,000,000) per depositor into their alternate bank account within a record time of four days of the bank closure.

“This unprecedented achievement of direct payment through BVN-linked alternate accounts without the need for depositors to visit NDIC offices or fill out forms marks a historic shift for the NDIC in the prompt reimbursement of depositors with payment of about 82.36 per cent of the total insured deposit to date.

Fate of uninsured depositors and creditors

For deposits exceeding the insured limit of N5 million, the corporation hinted that it has initiated the process of recovering debts and realizing assets from the defunct Heritage Bank to distribute liquidation dividends to these depositors.

After the full payment of both insured and uninsured portions of deposits, the NDIC will proceed with the payment of creditors by priority of claim as provided in the extant law.

“We would like to reiterate that all payments other than that of insured deposits are subject to availability and realisation of assets of the bank in the form of liquidation dividend,” it said.

Financial experts had told The ICIR that going forward, CBN needed to improve more on its oversight function by ensuring timely protection of depositors’ funds and investing public in order not to create image and panic problems.