Heritage Bank Closure: Here is How Customers Can Get Their Money Back

Following the Central Bank of Nigeria’s (CBN) decision to revoke Heritage Bank Plc’s banking license on June 3, depositors and shareholders have raised concerns on their supposed trapped funds.

The CBN revoked the bank’s license because of its inability to improve its financial performance. The regulator said Heritage has no reasonable prospects of recovery.

The Background

Heritage Bank, formerly known as Societe Generale, has faced regulatory challenges in the past. In 2006, the CBN closed down the institution after it failed to raise N25 billion ($155 million) to meet the new capital requirements at the time.

However, the bank sued the CBN over the closure and won the court case, leading to the reissuance of its license as a regional bank in 2012.

NDIC’s Role

The Nigeria Deposit Insurance Corporation (NDIC) has been appointed as the liquidator for Heritage Bank. Here’s what you need to know:

Liquidation Process: As the liquidator, the NDIC will oversee the bank’s closure. Their primary task is to sell the bank’s assets to raise capital for various purposes, including debt repayment.

Insured Deposits: The NDIC will pay a maximum of N5 million to each customer with insured deposits. Depositors with funds exceeding this insured amount will be paid as the bank’s assets are realized.

Timeline: Within 30 days of being appointed liquidator, the NDIC will initiate the process. They’ll prioritize depositors’ claims over other liabilities.

Payment Methods: Depositors can receive their insured amount in cash or through negotiable instruments. Transfer to another financial institution is also an option.

Proof of Claim: Qualified depositors will need to provide proof of their claims. The NDIC may seek court determination if any claim validity is disputed.

Shareholders and Directors: After settling insured deposits, the NDIC may distribute interim dividends from the bank’s realized assets. Shareholders and directors may also face individual liability.

ALSO READ: Why the Naira Missed the IMF’s Exchange Rate List in June 2024

Retrieving Your Deposits

Bashir Nuhu, spokesperson for the Nigeria Deposit Insurance Corporation (NDIC), recently assured depositors that they can retrieve their funds.

Here’s how:

1. Visit the nearest Heritage Bank branch and go with necessary documents.

Required docs:

• Proof of Account Ownership: This could be your account statement or passbook.

• Verifiable Identification: Bring your driver’s license, permanent voter’s card, or National Identity Card.

• Alternate Account Details: If you have another account, provide those details too.

• Bank Verification Number (BVN): This is essential for verifying your deposits.

• Verification and Payment: Once at the branch, your deposits will be verified, and insured sums will be paid out.

2. Creditors’ Claims

Online Platform Option: Creditors can also file their claims online through the bank’s platform.

Payment Process: Payments to creditors will begin once all depositors have been paid.

3. Unclaimed Deposits

Notice Period: The NDIC Act requires the corporation to give depositors at least three months’ notice. This notice can be mailed or published in national dailies and electronic media.

Forfeiture: If a depositor fails to claim their insured deposit within six years after the notice, the funds will be forfeited to the corporation.

Transferred Deposits: If the NDIC appoints another financial institution to assume deposits from a failed bank (like Heritage Bank), depositors must claim or continue their transferred deposit within six years.

Rights Reverted: After six years, if depositors don’t act, their rights against the failed bank and its shareholders revert to the corporation.

Refunds: Any unclaimed transferred deposit within six years will be refunded to the NDIC.

4. Legal Action

Suing the NDIC: Aggrieved depositors or shareholders who don’t receive payments can sue the NDIC.

Limited Remedy: The amount of actual loss suffered will be the maximum remedy.

Depositors: They receive the maximum insured deposit.

Shareholders: They get the nominal value of their shares in the insured institution.

Challenge License Revocation: Financial institutions and shareholders can challenge license revocation within 30 days.