Heritage Bank Depositors Reject NDIC’s Partial Refund Plan, Demand Full Payout

Heritage Bank Depositors Reject NDIC’s Partial Refund Plan, Demand Full Payout

Depositors with a minimum balance of ₦5 million in the defunct Heritage Bank have expressed strong dissatisfaction with the Nigeria Deposit Insurance Corporation’s (NDIC) plan to make only partial payments of their uninsured funds.

Their frustration was triggered by NDIC’s recent response to their earlier appeal to the National Assembly to compel the Central Bank of Nigeria (CBN) to release their trapped savings without further delay.

Reacting over the weekend, the depositors said NDIC’s March 30 statement confirming plans for pro-rata payments only validated their fears that the agency lacked sufficient resources and urgency to resolve the crisis.

Speaking on behalf of the affected customers, Ibrahim Elisha criticised the move, describing it as inadequate and damaging to public trust in Nigeria’s financial system.

“The dire financial predicament facing us demands swift, decisive intervention from the Presidency, National Assembly and the CBN.

“The NDIC has demonstrated its inability to fully reimburse affected depositors, even after liquidating the bank’s assets. A recent press statement—clearly issued in response to mounting media scrutiny—has confirmed that depositors will receive only partial payments, an unacceptable outcome that underscores the urgency of the situation.

“The NDIC’s pro-rata payment scheme is inadequate, exposing severe funding deficiencies that threaten public confidence in Nigeria’s banking system. For nine months, depositors have endured broken promises, uncertainty, and financial hardship.

“In times of distress, the CBN has historically provided bailout funds to stabilise financial institutions and prevent systemic collapse. It has done so in notable cases, including a ₦460 billion allocation to First Bank for Heritage Bank prior to its liquidation; support for the merger between Providus Bank and Unity Bank to preserve financial stability; a ₦700 billion lifeline extended to Unity Bank with favorable repayment terms; and the acquisition of Keystone Bank’s shares to avert institutional failure.”

The group questioned why the CBN was yet to intervene decisively in their case.

“Its inaction jeopardizes the entire financial ecosystem, creating unnecessary hardship for depositors who entrusted their savings to a bank that was assured to be stable.

“Delays are unacceptable. The credibility of Nigeria’s financial sector is on the line. If immediate bailout funds are not provided, public trust in financial institutions will erode, investor confidence will falter and global banking observers will question Nigeria’s commitment to economic stability,” they stressed.

The depositors called on President Bola Tinubu and the National Assembly to direct the CBN to release the necessary funds for NDIC to fully reimburse all affected individuals.

“Time is of the essence. Prolonged hesitation will intensify the crisis and inflict irreversible reputational damage. The government must step in without delay to restore trust and protect vulnerable depositors. The consequences of inaction are far too grave. Immediate action is non-negotiable.”

In its official response, NDIC said depositors had already received the insured sum of ₦5 million and that the remaining funds would be paid as liquidation dividends.

According to a statement by Hawwau Gambo, the agency’s acting Head of Communications and Public Affairs:

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“With the considerable progress recorded in the asset realisation, the corporation will declare the first tranche of liquidation dividends in April 2025 which will be paid to uninsured depositors on a pro-rata basis, in line with Section 72 of the NDIC Act 2023 on the priority of claims.

“For clarity, the referenced section states that: ‘Where an insured institution is unable to meet its obligations or suspends payment, or where its management and control have been taken over by the Central Bank of Nigeria following the revocation of its license, the assets of the insured institution shall be available to meet its deposit liabilities. Such deposit liabilities shall have priority over all other liabilities of the insured institution’.

“Consequently, other claimants of the failed bank, including creditors and shareholders, will be considered for payment of liquidation dividends only after all depositors have been fully reimbursed.

“The NDIC wishes to reiterate its commitment to the safety of depositors’ funds in all licensed banks. Members of the public are enjoined to continue their banking activities without fear, as all other banks remain safe and sound.”