By Muhammed Abubakar, Reporting
THE Nigeria Deposit Insurance Corporation (NDIC) has confirmed that, in accordance with existing legislation, it guarantees deposits of up to N5 million for customers of liquidated commercial banks, while depositors of other financial institutions are entitled to a maximum of N2 million.
The Corporation’s Managing Director, Mr Thompson Oludare Sunday, provided this clarification on Thursday while defending the 2026 budget before the House of Representatives Committee on Insurance and Actuarial Matters.
The explanation came in response to a query from Committee member and House Spokesperson, Hon. Akin Rotimi Jr, who sought assurances for depositors following the recent collapse of Heritage Bank.
Hon. Rotimi Jr raised concerns about public confidence in financial institutions, stating: “The question I wish to put to you concerns something our constituents and the public would like clarified. You will recall when Heritage Bank went into liquidation. There was considerable public outcry and anxiety, which risked undermining confidence in our financial system.”
He added: “Through the House leadership, we worked to reassure the public that the NDIC was in control and matters were being addressed. Nigerians want to know—to avoid speculation—when a bank or financial institution fails, what exactly is each depositor entitled to? Both individual and corporate depositors need to understand whether they will recover their full deposits.”
In response, the Managing Director explained that one of the NDIC’s primary mandates is deposit guarantee. To fulfil this function, the Corporation collects premiums from banks based on the deposits they hold—currently less than one per cent, having previously stood at 15/16 of one per cent, now calculated according to each institution’s risk assessment.
“The guaranteed sum stands at N5 million for commercial banks, payment service banks, and mobile money operators,” Mr Sunday stated. “For microfinance banks and other financial institutions, it is N2 million. That is the insured amount.”
He elaborated on the claims process: “Initially, we use your Bank Verification Number (BVN) to locate your accounts across other banks and automatically pay out the guaranteed sum—N5 million or N2 million, depending on the institution category. For deposits below this threshold, payment is made without you needing to visit our offices.”
Regarding the Heritage Bank case specifically, the MD noted that following the licence revocation on 3rd June 2024, the institution was handed to NDIC as liquidator. “We paid the guaranteed sum immediately. Subsequently, we began realising assets—selling buildings, equipment, and pursuing loan defaulters. We also recover the bank’s investments and distribute liquidation dividends.”
He revealed that on 6th January, the Corporation paid a second liquidation dividend tranche totalling N24.63 billion to Heritage Bank depositors. “Essentially, we continue pursuing debtors and selling assets to maximise recoveries. However, regarding deposit guarantee, the immediate entitlement remains N5 million or N2 million; additional payments depend on our recovery efforts.”
Committee Chairman, Hon. Ahmed Jaha Babawo, commended the Managing Director for the clarification, noting it had dispelled misconceptions about the Corporation’s mandate.
“Some people mistakenly believe NDIC covers all deposits without limit. There is indeed a ceiling, recently increased from N500,000 to N5 million per depositor. Coincidentally, Heritage Bank failed shortly after this enhancement,” he observed.
“It may interest members to learn that over 90 per cent of depositors received their insured amount within four days—meeting international standards set by the International Association of Deposit Insurers (IADI). The same applies to liquidation dividends, which we shall examine further in executive session.”
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