Depositors of the now-defunct Heritage Bank with balances above the N5 million insurance limit will start receiving partial refunds in April, according to the Nigeria Deposit Insurance Corporation (NDIC).
Background on Heritage Bank’s Closure
Heritage Bank’s sudden shutdown left many customers uncertain about their funds. The Central Bank of Nigeria (CBN) revoked its banking license on June 3, 2024, citing financial instability. The NDIC was then appointed as the liquidator, following legal provisions under the Banks and Other Financial Institutions Act (BOFIA) 2020 and the NDIC Act 2023.
NDIC Confirms Liquidation Dividend Payments
In a recent statement, NDIC’s Acting Head of Communication and Public Affairs, Hawwau Gambo, confirmed that progress had been made in recovering the bank’s assets. As a result, the first round of liquidation dividends will be disbursed in April 2025.
“With the considerable progress recorded in asset realization, 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,” the NDIC stated.
How Depositors Will Receive Their Funds
Customers with balances below N5 million have already received full reimbursements. However, those with higher amounts have so far only been paid the insured portion. The remaining funds will be distributed as liquidation dividends, depending on available recovered assets.
To generate funds for repayments, the NDIC has been selling Heritage Bank’s physical and investment assets while aggressively recovering outstanding loans.
Challenges in Reaching Some Depositors
The NDIC noted that while most insured depositors have been paid, some have yet to claim their funds. Issues such as incomplete Know Your Customer (KYC) information, post-no-debit restrictions, name mismatches, or a lack of alternative bank accounts have delayed payments. The corporation urged depositors to check their other bank accounts, as some payments may have already been processed without their immediate knowledge.
Deposit Liabilities Take Priority
Under Nigerian law, depositors’ claims take precedence over other financial obligations in a bank liquidation. The NDIC reaffirmed this in its statement, ensuring that depositors will be fully paid before creditors and shareholders receive any funds.
