Senate committee charges NDIC on liquidation of failed Heritage Bank assets

The Senate Committee on Banking, Insurance and other Financial Institutions has urged the Nigeria Deposit Insurance Corporation to get the maximum value from the assets of the failed Heritage Bank to settle its stakeholders.

The call was made on Saturday in Lagos by the Chairman of the committee, Senator Adetokunbo Abiru, at the Stakeholders Retreat of the Senate Committee, themed ‘Building Resilient Financial Systems through Effective Legislative Interventions’.

The Central Bank of Nigeria appointed NDIC as the liquidator of Heritage Bank in June upon the revocation of the bank’s licence.

Since then, the corporation has refunded a significant portion of the depositors through the use of the Bank Verification Number.

Speaking at the retreat, Abiru said, “Another critical area that deserves commendation is the NDIC’s role in resolving the issues surrounding the failed Heritage Bank. Your efforts in this regard have not gone unnoticed, and I applaud the NDIC for its diligence and commitment to restoring hope to those affected. “The process of settling depositors is never easy, particularly in cases involving significant financial distress, but your dedication to resolving this matter demonstrates the high standard of operational efficiency that we, as stakeholders, have come to expect from the NDIC.

“Nevertheless, I urge the corporation to ensure that maximum value is realised from the bank’s remaining assets, which will ultimately contribute to the settlement of outstanding depositors and other creditors. I hope that all the challenges associated with the settlement of the bank’s stakeholders, including those to do with liquidation dividends for corporate customers, are resolved speedily, effectively, and efficiently.”

“It goes without saying that the financial system is reliant on the ability of institutions like the NDIC to execute asset liquidations without unnecessary delays while maximizing the recovery for stakeholders. I trust that the NDIC, with its wealth of experience and expertise, will manage this process in a way that minimises disruption to the financial sector and maximizes the value for depositors.”

Abiru also commended the corporation for the increase in the deposit insurance coverage, saying, “By increasing the deposit insurance coverage for commercial banks from N500,000 to N5m capturing nearly 99 per cent of depositors, NDIC has once again demonstrated its commitment to adapting to the changing economic landscape and ensuring that the interests of small depositors, in particular, are fully protected.

“This policy adjustment is a testament to the NDIC’s responsiveness and its drive to mitigate risks that depositors may face in our financial institutions. I would like to use this opportunity to encourage the NDIC to continue innovating and adapting its policies to meet global standards and maintain its relevance in Nigeria’s financial ecosystem.”

On the threats of cyberattacks to the financial system, the senator said that the legislative frameworks must evolve to keep pace with the new realities.

“We must ensure that regulators like the CBN and the NDIC have the tools they need to effectively oversee the financial sector, while also encouraging innovation and competition. As we continue to embrace digital banking and financial technologies, the threats posed by cybercrime and data breaches are becoming more pronounced.

“Recent cybersecurity incidents in the banking sector highlight the need for more stringent regulatory oversight and greater investment in cybersecurity measures. Legislative interventions must prioritize the establishment of robust cybersecurity frameworks that safeguard not only financial institutions but also the sensitive data of millions of Nigerians,” the senator noted.

In his welcome address, the Managing Director/Chief Executive Officer of NDIC, Bello Hassan, said, “Recognising the relevance of protecting consumers within the financial system, the corporation has been actively complementing the consumer protection efforts of the CBN. We have enhanced public awareness of the benefits and limitations of the deposit insurance system and financial literacy to reduce the rate at which small depositors are being defrauded, thereby enhancing confidence in the banking system.

“We have invigorated our liquidation activities and greatly increased the debt recovery rate, leading to the declaration of 100 per cent liquidation dividends to depositors of over 20 deposit money banks in-liquidation; and we have also improved our system, process and procedures to promote transparency and accountability in our operations.”

Hassan also reassured bank customers that the Nigerian banking system was safe and sound.