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The Nigeria Deposit Insurance Corporation (NDIC) has clarified that depositors of liquidated commercial banks are entitled to a maximum insured sum of N5 million, while depositors in microfinance banks and other financial institutions are guaranteed up to N2 million.
The Managing Director of NDIC, Mr. Thompson Oludare Sunday, gave the clarification on Thursday during the corporation’s 2026 budget defence before the House of Representatives Committee on Insurance and Actuarial Matters.
His explanation followed concerns raised by lawmakers over the fate of depositors affected by the collapse of Heritage Bank.
The House Spokesperson, Hon. Akin Rotimi Jr., who posed the question, said the recent liquidation of Heritage Bank had generated public anxiety and concerns about confidence in the banking sector.
“You will recollect when Heritage Bank went under; there was a lot of public outcry and concerns, which could affect confidence in our financial institutions,” Rotimi said.
“Nigerians want to know, to avoid speculation, when a bank or financial institution has issues and goes under, how much is each depositor entitled to in comparison to what they have deposited? Are they going to get their entire deposits?”
Responding, Sunday explained that deposit guarantee remains one of NDIC’s core mandates and is funded through premiums paid by banks.
“In performing this function, we receive premium from banks for the deposits that they hold. What we take is a premium, which is now less than one per cent and is based on the risk assessment of each institution,” he said.
He stressed that NDIC does not insure the entire deposit base of banks but guarantees deposits up to a statutory limit.
“The guaranteed sum is N5 million for deposit money banks, primary mortgage banks and mobile money operators. For microfinance banks and other financial institutions, it is N2 million. That is the insured amount,” he stated.
Sunday further disclosed that the corporation pays insured sums promptly once a bank’s licence is revoked, often without depositors needing to file claims.
“Even without you having to come to the corporation or the bank, we use your BVN to trace your accounts in other banks and pay the insured sum. Any amount of N5 million and below is paid automatically,” he explained.
Using Heritage Bank as an example, the NDIC boss said the bank’s licence was revoked on June 3, 2024, after which it was handed over to NDIC as liquidator. “We paid the guaranteed sum immediately.
Thereafter, we realise the assets of the bank, we sell buildings, machinery and other assets. We also pursue debtors who borrowed and have not repaid. From these recoveries, we pay what is called liquidation dividends,” he said.
He revealed that on January 6, NDIC paid a second tranche of liquidation dividends amounting to N24.63 billion to depositors of Heritage Bank.
“On top of the N5 million insured sum, whatever we realise from asset sales, loan recoveries and investments is used to pay additional dividends.
We are still chasing debtors and selling assets to ensure we recover more funds,” Sunday added.
In his remarks, Chairman of the Committee, Hon. Ahmed Jaha Babawo, commended the NDIC management for the clarification, noting that many Nigerians mistakenly believe the corporation covers all deposits without limit.
“Some people thought NDIC covers every deposit. They have a limit. In fact, it was recently increased from N500,000 per depositor to N5 million per depositor. Shortly after that, Heritage Bank went down,” Jaha said.
He further disclosed that over 90 per cent of Heritage Bank’s depositors received their insured sums within four days, in compliance with international standards set by the International Association of Deposit Insurers.
The clarification, lawmakers said, is expected to strengthen public understanding of deposit insurance coverage and boost confidence in Nigeria’s banking system amid concerns over bank failures.
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