House to Probe Revocation of Heritage Bank’s Licence

Juliet Akoje in Abuja

The House of Representatives has mandated its Committee on Banking Regulations in collaboration with other relevant bodies to set up an investigation into the circumstances surrounding the revocation of Heritage Bank’s operating licence and report back to it within two weeks for further legislative action.

The lawmakers also urged the Central Bank of Nigeria (CBN) to conduct a thorough investigation of the leadership and management of Heritage Bank to identify any possible issues of mismanagement or wrongdoing that may have contributed to the bank’s failure.

It further urged the Nigerian Deposit Insurance Corporation (NDIC) to conduct a comprehensive review of its operations and the effectiveness of its mandate to ensure that it was adequately equipped to fulfill its role as deposit insurer and investor of failed banks. The resolutions followed the adoption of a motion on the “urgent need to investigate Heritage Bank crises and protect depositors’ interest,’ moved by Hon. Uchenna Harris Okonkwo, at plenary yesterday.

Okonkwo, noted that, “With the utmost gravity, it is acknowledged that the Federal Government of Nigeria diligently upholds its solemn obligation to safeguard and nurture the lives and welfare of its esteemed citizens, displaying unwavering dedication to ensuring their safety, security and general well-being, regardless of their geographical whereabouts, given recent developments surrounding the Heritage Bank.

“The government expresses profound and unwavering concern for the welfare and prosperity of its treasured citizens, particularly depositors who have placed their trust in financial institutions, emphasising the critical need for strong regulatory oversight to protect their interests.”

He also noted that, “on June 3, 2024, the Central Bank of Nigeria (CBN) publicly declared the revocation of Heritage Bank’s licence, 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 lawmaker further noted that, “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, prioritising immediate verification and disbursement of insured deposits to the bank’s depositors.

“Amidst the prevailing economic challenges in Nigeria, the financial stability of its citizens has been significantly compromised, limiting compensation to N5 million is deeply inadequate to alleviate the substantial losses experienced by depositors who had placed their trust in Heritage Bank, exacerbating their financial distress and uncertainty.”

The House therefore urged the NDIC and other pertinent authorities to carefully reassess the current compensation scheme, with a view to offering more meaningful relief to depositors who have experienced substantial financial losses.

Furthermore, they urged the federal government to establishment a robust and well-funded depositors’ protection fund to provide greater financial security and assurance for depositors in the event of bank failures.