The Committee of Banks’ Chief Executive Officers in Nigeria
has said that there is an urgent need for all banks to cooperate and
collaborate to identify and go tougher on chronic debt defaulters.
The committee said this would go beyond publishing names of
such defaulters in national media (which is inevitable), but involved all banks
speaking with one voice, sharing information about those entities, and refusing
to do further business with them until they settled their obligations.
The bank CEOs condemned the actions of bad debtors who now
resorted to smear campaigns against banks and their chief executives in order
to either delay repaying loans or avoid meeting their debt obligations
completely.
During a meeting in Lagos to review what it called the
“harassment and criminalisation of banks’ CEOs by law enforcement agencies,”
the body noted that chronic bank debtors were now in the habit of enlisting law
enforcement agencies including police, judiciary and state securities to harass
and criminalise banks’ CEO, which was unacceptable.
The committee noted that the loan defaulters were known to
have abused court processes as well as using social media to propagate their
smear campaign against the banks.
A communiqué issued after the meeting noted that the
activities by the law enforcement agencies and the bank debt defaulters were
capable of adversely affecting the banking system through the CEOs’ reputation
among international banks as well as destroy the economy.
They, therefore, called for the issue to be checked and
managed.
In order to tackle what the body saw as an emerging threat
to the banking business in Nigeria, the Committee of Banks’ CEOs outlined a
five-step resolution of actions that banks would need to take.
The resolutions and planned actions were arrived at after
members discussed and considered different options for dealing with the issue.
To avoid the kind of crisis that rocked the banking sector
10 years ago, the CEOs urged all agencies and stakeholders to step up and help
fight the inherent menace of chronic loan defaulters.
According to the CEOs, the banking industry is the backbone
of the Nigerian economy; therefore, it was the responsibility of all stakeholders,
regulators, police, judiciary, corporate organisations and media to help save
it from activities of delinquent debtors.
The group resolved that all cases of defaults would be
presented and passed through the Bankers’ Committee Ethics Committee just as it
intended to work with legal councils and come up with ways and strategies to
manage related cases effectively without disrupting businesses and the system.
Nigerian bank’s non-performing loans stood at N2.245tn as of
the end of September 2018, according to the National Bureau of Statistics.
The NBS revealed that in the period under review, the
country’s gross loans stood at N15.861tn, while loans (after specific
provisions) stood at N13.332tn.
According to the NBS, as of the end of June, non-performing
loans stood at N1.939tn while gross loans and loans (after specific provisions)
were N15.50tn and N13.587tn respectively.
The Asset Management Corporation had recently published a
list of defaulters that it termed as delinquent debtors. They allegedly owed
about N906.1bn.
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Debtors! Be warned!!
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