Reps ask CBN to probe Heritage Bank management
On Tuesday, the House of Representatives intervened in the turmoil surrounding Heritage Bank Plc following the Central Bank of Nigeria's (CBN) recent revocation of the bank’s operating license.
The crisis was triggered by a June 3, 2024, statement from Mrs. Hakama Ali, the acting Director of Corporate Communications for the CBN, citing the bank’s non-compliance with best practices as the reason for the withdrawal. This action stirred public concern regarding the security of depositor funds.
In response, the CBN reassured customers, guaranteeing the protection of their deposits with the now-defunct bank.
During a plenary session on Tuesday, the House adopted a motion of urgent public importance initiated by Uchenna Okonkwo, representing the Idemili North/Idemili South Federal Constituency of Anambra State, leading to a directive for the CBN to investigate the bank's leadership for potential mismanagement or other misconduct.
Additionally, the House called on the Nigeria Deposit Insurance Corporation (NDIC) to review its operations to better fulfill its role as deposit insurer and investor for failed banks.
The parliamentary body also advocated for fair compensation for those negatively impacted by the bank’s collapse and urged the federal government to establish a well-funded depositor protection fund to provide greater security and timely compensation for bank customers in future failures.
Moreover, the House directed its Committee on Banking Regulations to start public education campaigns on the risks of banking and the benefits of diversifying financial assets.
The motion highlighted the NDIC’s swift initiation of liquidation procedures under the NDIC Act 2023, emphasizing the distribution of insured deposits to Heritage Bank’s customers. However, the motion’s mover, a Labour Party chieftain, criticized the NDIC’s limitation on payments to a maximum of N5 million per depositor, noting it as insufficient given the current economic climate and that the disclosure of the bank's poor financial health was not made sooner, leaving depositors unprepared for the bank’s collapse.
The lawmaker expressed deep concern over the significant financial losses and emotional distress experienced by depositors, emphasizing the need for a thorough reassessment of regulatory oversight to rebuild public trust and ensure depositor protection.
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