The Nigeria Deposit Insurance Corporation (NDIC) has moved swiftly to provide relief for customers of two failed mortgage banks, announcing a payout package for insured deposits. This follows the recent revocation of the operating licences of Aso Savings and Loans Plc and Union Homes Savings and Loans Plc by the Central Bank of Nigeria (CBN).
CBN's Regulatory Action and Reasons for Licence Revocation
The Central Bank of Nigeria formally withdrew the licences of the two institutions on Tuesday, December 16, 2025. The apex bank stated that the action was taken under the powers granted by Section 12 of the Banks and Other Financial Institutions Act (BOFIA) 2020 and Section 7.3 of the Revised Guidelines for Mortgage Banks in Nigeria.
The CBN cited multiple critical failures by the banks, including their inability to meet the minimum paid-up share capital required for their licence category. Furthermore, the banks were found to have weak asset positions that could not cover their liabilities and were severely undercapitalised, with capital adequacy ratios falling below prudential limits. The regulator also noted persistent non-compliance with its directives, despite repeated supervisory interventions.
NDIC's Payout Framework and Verification Process
In response, the NDIC has commenced the liquidation process for both banks under Section 55(1) and (2) of the NDIC Act 2023. The corporation has assured all depositors that their insured funds are secure.
Depositors with verifiable claims are entitled to receive up to N2 million each, irrespective of their account type. This payout represents the maximum insured deposit limit under current regulations. Payments will be made directly into alternate bank accounts that are linked to the depositor's Bank Verification Number (BVN), which will serve as the primary identifier for swift and accurate processing.
Affected customers have been advised to submit their claims through the NDIC's online claims portal by completing a digital verification form. For those who prefer physical verification, NDIC officials will be available at the nearest branches of the closed banks from December 16 to December 30, 2025. Required documents include proof of account ownership, a valid means of identification, BVN details, and information for an alternate bank account.
What Happens to Balances Exceeding N2 Million?
For customers whose deposits exceed the N2 million insurance threshold, the NDIC has outlined a phased payment plan. Depositors will receive the insured N2 million portion immediately. The remaining balance will be treated as a claim in the liquidation process.
The NDIC stated that it is now focused on recovering loans owed to the failed banks and disposing of their assets. The proceeds from these recoveries and asset sales will be used to pay liquidation dividends to depositors with balances above the limit. These subsequent payments will be made as funds become available, ensuring a transparent and fair process for all claimants.
Creditors of the banks are also expected to submit their claims within the same December deadline. However, by law, all depositors must be fully settled before any payments are made to creditors.
Implications for Staff, Shareholders, and Debtors
The NDIC clarified the position of other stakeholders in the liquidation. Staff of the defunct banks will be paid their entitlements from the proceeds of asset sales, but only after all depositors have been fully compensated. Shareholders will be considered only after all other obligations, including those to depositors and creditors, have been settled.
Conversely, debtors of Aso Savings and Union Homes have been urged to approach the NDIC's Asset Management Department to regularise and repay their outstanding loan obligations. The corporation emphasised that recoveries from these debtors are central to speeding up payments to depositors with uninsured balances.
This event is part of broader reforms by the CBN aimed at strengthening Nigeria's mortgage banking subsector and maintaining overall financial system stability. It follows a similar action where the CBN revoked the licence of Heritage Bank Plc in June 2024.
