The NDIC In a statement issued on Monday said it commenced
the liquidation process in pursuant to Section 12(2) of BOFIA, 2020, and
in accordance with Section 55
sub-section 1 & 2 of the NDIC Act 2023.
The CBN earlier yesterday announced the revocation of the
bank’s licence with immediate effect.
The apex bank said the action became necessary due to the
bank’s breach of Section 12 (1) of BOFIA, 2020. The board and management of the
bank have not been able to improve the bank’s financial performance, a
situation which constitutes a threat to financial stability.
The withdrawal of operational licence is in accordance with
its mandate to promote a sound financial system in Nigeria and in exercise of
its powers under Section 12 of the Banks and Other Financial Act (BOFIA) 2020,
hereby
This follows a period during which the CBN engaged with the
bank and prescribed various supervisory steps intended to stem the decline.
“Regrettably, the bank has continued to suffer and has no
reasonable prospects of recovery, thereby making the revocation of the licence
the next necessary step,” CBN’s spokeswoman, Hakama Ali said in a statement on
Monday.
The CBN took the action to strengthen public confidence in
the banking system and ensure that the soundness of our financial system is not
impaired.
The CBN also said the NDIC has been appointed as the
Liquidator of the bank in accordance with Section 12 (2) of BOFIA, 2020.
“We wish to assure the public that the Nigerian financial
system remains on a solid footing. The action we are taking today reflects our
continued commitment to take all necessary steps to ensure the safety and
soundness of our financial system,” the statement reads in part.
Relatedly, to be verified, the NDIC said “depositors of the bank that have alternate
accounts within the industry will be paid up to the insured amount of N5
million per depositor using their Bank Verification Number (BVN) to locate
their alternate account. While depositors with funds in excess of N5 million
will be paid liquidation dividend upon realisation of the bank’s assets and
recovery of debts owed to the bank.
For the verification and payment of depositors without
alternate bank account, the NDIC, urged them to “visit the nearest branch of
the bank with proof of account ownership, verifiable means of identification
such as driver’s licence, permanent voter’s card, National Identity Card,
together with their alternate account and Bank Verification Number (BVN) for
the verification of their deposits and subsequent payment of insured sums.”
The statement by the Director Communication and Public
Affairs of the NDIC Bashir A. Nuhu noted that claims can also be filed online
by visiting the NDIC website claims page. Depositors are expected to download
and fill the claims forms and upload the required documentation.
Creditors are also advised to visit the nearest branch of
the bank to file their claims or via the online platform. Please note that the
process of payment of creditors will commence immediately after all depositors
have been paid.
The NDIC also urged debtors that are yet to complete the
repayment of loans are advised to contact the Corporation’s Asset Management
Department (AMD).
“The NDIC wishes to assure the entire banking public of its
commitment to the continued safety of depositors’ funds in all licensed banks.
As such, depositors are urged to continue their banking businesses without fear
as banks whose licences have not been revoked remain safe and sound.
Meanwhile, the House of Representatives has assured
depositors and stakeholders of Heritage Bank that it will carry out its
constitutional oversight functions to ensure that revocation of the bank’s
licence by the Central Bank of Nigeria (CBN) does not negatively impact them.
The House said, relevant House Committees on Banking
Regulations; and Insurance will be up to their duty, thoroughly examine the
circumstances surrounding the CBN decision and the subsequent steps taken by
the Nigeria Deposit Insurance Corporation (NDIC).
Spokesperson/Chairman, House Committee on Media and Public
Affairs, Hon. Akin Rotimi, who gave these assurances in a statement issued in
Abuja on Monday, urged all depositors
and stakeholders to remain calm and be assured of our dedication to protecting
their interests.
Rotimi said the priority of lawmakers was to safeguard the
interests of all depositors and maintain the stability of the financial system.
He also said the Green Chamber will engage with the CBN,
NDIC, and other relevant stakeholders to ensure a transparent and orderly
resolution process, providing necessary support to mitigate any potential
negative impact on the public.
The House Spokesperson urged the CBN and NDIC to establish
clear channels of communication to allay the fears of the public and prevent
any loss of trust in the country’s financial system, saying effective public
engagement was crucial to maintaining confidence during the period.
He quoted the Chairman of the House Committee on Banking
Regulations, Hon. Mohammed Bello El-Rufai said: “The Committee on Banking
Regulations will closely monitor the liquidation process to ensure that the
rights of depositors are protected and that the process adheres to the highest
standards of transparency and accountability.”
According to Rotimi, the chairman of the House Committee on
Insurance and Actuarial Matters, Hon. Ahmed Usman Jaha assured that the panel,
“will work diligently to oversee that the NDIC executes its mandate
effectively, ensuring the protection of depositors’ funds and maintaining
confidence in the financial sector.
“The NDIC Act and the Banks and Other Financial Institutions
Act (BOFIA) are clear in their provisions that depositors’ funds are insured
and protected.”