- Larger Depositors To Get Balance After Assets Are Sold
- Depositors To Get Maximum Of N5m On Deposits- NDIC
- Preference Given To Secured Depositors, Verified Creditors
- Shareholders Fate Unknown Over Negative Shareholders’ Funds
Anxiety and apprehension regarding the safety of their fund has hit customers of Heritage Bank Plc whose operating license was revoked early on Monday due to financial instability.
Nigerians woke up to the not too shocking news of the revocation of the operating licence of Heritage Bank triggering fears amongst customers of the bank.
To allay the fears on the safety of depositor’s funds, the Nigerian Deposit Insurance Corporation (NDIC) in a swift reaction disclosed that it will pay a maximum of N5 million to each depositor of the bank.
This was contained in a notice to depositors of the bank on Monday by the NDIC while noting that the stipulated maximum payment is in line with extant laws in the case of revocation of licences.
The corporation advised customers to remain calm as it initiates the process of settling insured deposits.
READ ALSO: CBN Revokes Heritage Bank License
“The Governor of the Central Bank of Nigeria (CBN) on 3RD day, June, 2024, revoked the banking licence of Heritage Bank. Consequently, the Corporation, as the appointed Liquidator; in line with sections 55 (1) (2) and 56 (3) of Nigeria Deposit Insurance Corporation (NDIC) Act, 2023, will take necessary steps to wind up the affairs of the bank.
“Consequently, the Corporation, as the appointed Liquidator; in line with sections 55 (1) (2) and 56 (3) of Nigeria Deposit Insurance Corporation (NDIC) Act, 2023, will take necessary steps to wind up the affairs of the bank”.
“Defunct Heritage Bank operated as an insured institution under the provisions of the Nigeria Deposit Insurance Corporation Act, 2023.
“The Corporation will pay all its depositors their insured deposits up to the statutory maximum of N5,000,000.00 per depositor for Deposit Money Banks (DMBS)/mobile money subscribers.
“Depositors with funds in excess of the insured deposits will be paid as and when the assets of the closed bank are realised.
“Depositors will soon be notified by publication in national dailies as to the commencement of payment of the insured deposits” the statement reads.
READ ALSO: Heritage Bank Depositors To Get Maximum Of N5m On Deposits- NDIC
According to the statement, all depositors who have questions or require further clarifications on their accounts or payments in the closed bank can contact the NDIC.
This means that each depositor who has up to N5m in their account is guaranteed to receive their deposits up to N5 million. According to the NDIC, the amount will fully cover about 98.98% of depositors.
For the remaining percentage of depositors who have above N5m in their accounts, the NDIC will manage the sale of the bank’s assets and use the proceeds to pay out these larger deposits according to global best practices.
The NDIC says it will soon notify depositors through national newspapers regarding the commencement of insured deposit payments.
Depositors are encouraged to stay alert for these notifications to understand how and where to claim their funds.
According to Investopedia, when it comes to the issue of prioritization of claims, claims are prioritized according to the banking regulations and laws of the relevant jurisdiction.
READ ALSO: CBN should adhere to monetary policy and not beyond its mandate- Agbakoba
Continuing, the investment encyclopedia disclosed that in cases of asset distribution, assets are distributed to creditors in order of priority, with secured creditors receiving priority over unsecured creditors while depositors are paid from the assets available, subject to any applicable deposit insurance coverage with shareholders the last line of recipient of whatever is left, if any.
