From Ndubuisi Orji, Abuja
The House of Representatives has charged the Central Bank of Nigeria (CBN) to probe the circumstances surrounding the collapse of Heritage Bank.
The House also mandated the Nigerian Deposit Insurance Corporation (NDIC) to conduct a comprehensive review of its operations, so as to ensure that it is adequately equipped and resourced “to fulfill its role as deposit insurer and investor of failed banks, “.
The House which took the resolutions following the adoption of a motion by Uchenna Okonkwo, on need to protect Heritage Bank depositors, also advocated for
“fair and compassionate compensation for depositors, ” affected by the collapse of Heritage Bank.
It also urged the NDIC and other relevant authorities to assess the current compensation scheme “with a view to offering more meaningful relief to depositors who have experienced substantial financial losses. ”
The parliament, while urging its Committee on Banking Regulations to promote public awareness on the need to diversify their financial holding, said it would explore amendment to extent laws ” to increase the maximum insured amount to better protect depositors’ interests. ”
Okonkwo, in his lead debate, noted that the collapse of the bank has subjected depositors to financial distress. He added that is worrisome that the apex bank allegedly failed to disclose the financial health of Heritage Bank to the public.
According to him, “On June 3, 2024, the Central Bank of Nigeria (CBN) publicly declared the revocation of Heritage Bank’s license, citing its violation of Section 12 (1) of the Banks and Other Financial Institutions Act (BOFIA), 2020, Consequently, the CBN designated the Nigerian Deposit Insurance Corporation (NDIC) as the entity responsible for overseeing the liquidation process;
“The NDIC has initiated the liquidation process of Heritage Bank Plc in accordance with Section 55, sub-sections 1 and 2 of the NDIC Act 2023, The corporation has swiftly commenced the liquidation procedures of the failed bank, prioritizing immediate verification and disbursement of insured deposits to the bank’s depositors.
“The NDIC has initiated the liquidation process, which regrettably limits the verification and payment of depositors to a maximum insured amount of only 5 million Naira. ”
Nevertheless, he lamented that ” the NDIC, in its statement dated June 3, 2024, has specified that depositors with funds surpassing 5 million Naira will receive liquidation dividends only after the realization of the bank’s assets and the retrieval of debts owed to the bank. “