NDIC Promises to Recover N700 Billion in Loans, Advances, and the N650 Billion Inherited Bank Upon Takeover of the Defunct Heritage Bank
Mr. Bello Hassan, the managing director and chief executive of the Nigeria Deposit Insurance Corporation (NDIC), has promised to use all of the resources at its disposal to recoup the over N700 billion in loans
and advances that the now-defunct Heritage Bank Plc owes. The Central Bank of Nigeria (CBN) recently revoked Heritage Bank Plc’s operating license.
According to Hassan, the NDIC is in charge of paying qualifying creditors and depositors as well as collecting all outstanding obligations. In addition, he announced that this week, instead of the 30 days
required by the NDIC Act, protected deposits would be paid to the bank’s clients.
He claims that 4,000 insured depositors have balances of N5 million or more, while 2.3 million insured depositors have less than N5 million.
He clarified that, as a result of the most recent upward revision of the minimum deposit cover, the insured amount for the deposits was still just N5 million. According to him, the company could have paid the
beneficiaries without having to wait to realize the assets of the bank that failed.
According to Hassan, 99.9% of the bank’s depositors had assets worth less than N5 million, which allowed
them to pay their whole deposit cover. He pleaded with the creditors to submit their demands.
“We would pay it instantly from the Deposit Insurance Fund, which we have built over the years through annual assessment of premium balance paid by these banks,” Hassan declared.
He also revealed that the company discovered N650 billion in deposits when it took over the troubled bank, and that amount might have increased by the time its inspectors finished their ongoing investigations.
He did, however, add that it would be challenging to estimate when uninsured depositors—that is, the deposits made by employees and management of the bank that
failed—would be paid back because payment would need to be made before the bank’s assets are sold.
He went on to say that deposits utilized as loan collateral were also included in the uninsured group.
He added that the NDIC was gathering evidence in this regard and that it was prepared for any litigation that might arise from the liquidation process.
Reiterating that depositors typically suffer when lawsuits are postponed, Hassan stated that the company was already reaching out to the legal system for assistance in securing an expedited hearing of the cases.
He insisted that NDIC was working as fast as it could to fulfill its obligation to recover and compensate depositors.
The CEO of the NDIC also acknowledged that in the past, the company had seen notably poor loan recovery rates from bank failures.
However, he added that the NDIC Act 2023 has given the company more authority to deal with debtors this time.
“Recovering them as soon as possible is the most important thing, and we’re going to use the powers granted to us under the Act to do that,” he declared.
He said contrary to suggestions that the revocation of the bank’s license was politically-motivated, it was purely a regulatory action for which the apex bank had issued clarifications.
