NDIC Reimburses 700,000 Heritage Bank Depositors, Moves to Pay Customers of 46 Failed MFBs

By Adedapo Adesanya

The Nigeria Deposit Insurance Corporation (NDIC) says it has paid the insured deposits of about 700,000 customers of the defunct Heritage Bank and has commenced the reimbursement of depositors of 46 microfinance banks (MFBs) whose operating licences were recently revoked by the Central Bank of Nigeria (CBN).

The chief executive of NDIC, Mr Oludare Sunday, made this known on Wednesday during a retreat for members of the House of Representatives Committee on Insurance and Actuarial Matters in Lagos.

He said the corporation immediately began settling the insured deposits of customers after the CBN revoked the licences of the 46 microfinance banks and appointed the NDIC as their provisional liquidator.

“We are working on those. The CBN revoked the licences, and we were appointed as the provisional liquidator. We have started paying depositors of those banks, and gradually we intend to cover all the insured depositors,” he said.

Mr Sunday explained that the NDIC’s responsibility extends beyond paying insured deposits to recovering outstanding loans owed to the failed institutions and disposing of their assets to generate funds for the settlement of uninsured depositors.

“Our function as liquidator involves the payment of guaranteed sums. Thereafter, we go after those who owe the institutions and have not paid. We also ensure that we sell the available assets and realise their investments towards paying the uninsured portion of the deposits. So, we have started paying the guaranteed deposits. What we are doing now is also realising the assets of those institutions,” he stated.

Although he declined to disclose the exact number of depositors of the failed microfinance banks who had been reimbursed, Sunday said the Corporation was working with the Nigerian Interbank Settlement System (NIBSS) to identify depositors through their Bank Verification Numbers (BVN) to ensure seamless payments.

“So, the more accounts we discover, the more payments we make,” he added.

Providing an update on the liquidation of Heritage Bank, the NDIC chief said about 700,000 depositors had already received their insured deposits, while efforts were ongoing to trace other customers whose identities could not be verified from available records.

He attributed the challenge to legacy accounts created before the introduction of the BVN system, as well as incomplete customer records inherited from banks that were later merged into Heritage Bank.

“If you know Heritage Bank, you know it is an amalgamation of several banks, including the acquisition of Enterprise Bank in 2014. So, if you think of banks like Guardian Express and Spring Bank, they are all part of Heritage Bank.

“There are depositors we have not been able to trace, and this is an opportunity for them to come forward. I am sure many of us did the National Youth Service Corps (NYSC) and may have left some money in an account, but there was no BVN then.

“Even the addresses we had were sometimes things like ‘opposite filling station.’ How do you trace such a person? Once they come forward, and for those we have been able to identify from the institution’s database, we have been paying them,” he explained.

Mr Sunday added that the Corporation would continue to recover outstanding loans and dispose of Heritage Bank’s assets to generate funds for the payment of liquidation dividends to depositors whose balances exceeded the insured limit.

Earlier in his remarks, he described the NDIC as a critical pillar of Nigeria’s financial safety net, stressing the need for stronger collaboration between regulators and the National Assembly as the banking sector responds to recapitalisation efforts and rapid financial technology developments.

According to him, while the ongoing banking recapitalisation programme has strengthened the resilience of financial institutions, it must be complemented by sound corporate governance, effective risk management, strict regulatory compliance and robust supervision to safeguard long-term financial system stability.

He also disclosed that more than 98 per cent of depositors, representing over 281 million accounts across insured financial institutions, are fully protected under the NDIC’s deposit insurance scheme.