The Nigerian Deposit Insurance Corporation (NDIC) has announced that the repayment of depositors at Heritage Bank will begin by the end of this week.

NDIC Managing Director Bello Hassan disclosed this during a briefing on the bank’s liquidation in Abuja on Wednesday. The liquidation process commenced after the Central Bank of Nigeria (CBN) revoked Heritage Bank’s banking licence on Monday.

Hassan stated that Heritage Bank’s total deposits stand at N650 billion, while its loan portfolio exceeds N700 billion. He emphasized that the NDIC aims to ensure loan repayments within the next six months.

The NDIC MD explained that all depositors are currently undergoing verification to receive an insured benefit of up to N5 million. Depositors with balances exceeding N5 million will be paid after the bank’s assets are sold. He noted that Heritage Bank has approximately 2.3 million depositors, with 99% having balances below N5 million.

Heritage Bank operates about 116 branches nationwide. The NDIC’s assurance of repayment is expected to alleviate the panic among customers following the licence revocation.

The CBN justified the licence revocation under its mandate to maintain a sound financial system in Nigeria, citing Section 12 of the Banks and Other Financial Institutions Act (BOFIA) 2020. According to a statement from Hakama Ali, the Acting Director of Corporate Communications at the CBN, Heritage Bank breached Section 12 (1) of BOFIA, 2020.

Ali added that the bank’s Board and Management had failed to improve its financial performance, posing a threat to financial stability. Despite various supervisory measures prescribed by the CBN, the bank’s decline continued, leading to the licence revocation as a necessary step.

The CBN emphasized that the action was taken to reinforce public confidence in the banking system and ensure the financial system’s soundness. The apex bank has appointed the NDIC as the liquidator of Heritage Bank under Section 12 (2) of BOFIA, 2020.