Explaining outcome of bank failures on depositors’ funds

Heritage Bank Plc’s licence has been immediately revoked by the Central Bank of Nigeria (CBN).
The stated purpose of this decision was to uphold a sound and steady financial system, in accordance with Section 12 of the 2020 Banks and Other Financial Institutions Act (BOFIA).

Heritage Bank’s violation of Section 12 (1) of BOFIA 2020 led to the revocation, according to a statement from Mrs. Hakama Sidi Ali, Acting Director, Corporate Communications.

When your bank’s licence is revoked, the following occurs to your money as a customer:

After confirming the eligibility of the depositors at the shuttered banks on the premises, the Nigeria Deposit Insurance Corporation (NDIC) would expeditiously begin the payout process of guaranteed sums to such depositors.

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The insured limit for deposits made at any insured Deposit Money Bank (DMB), such as Heritage, is a maximum of N5,000,000 for each depositor.

This suggests that if a bank were to become insolvent or closure by the Central Bank of Nigeria (CBN), you would receive payment of N5 million if you had approximately N10 million in your account.

In order to enable the verification and reimbursement of their protected savings, depositors would then need to produce the requisite paperwork, such as evidence of account ownership, legitimate identification, and an alternative bank account.

The joint account and each of the individually-owned accounts are separately insured up to the insured maximum sum if a husband and wife or any other two or more people have a joint account in the same insured bank in addition to their individual accounts.