Banks chasing N420b bad loans

bank-greeneuropeanjournalBY August 1, loan defaulters would have their names published in the list of bank debtors, which would mean blacklisting the individual or organisation, the Bankers’ Committee meeting in Abuja resolved yesterday.

The Director of Banking Supervision, Central Bank of Nigeria (CBN), Mrs. Martins Tokunbo, who addressed the media alongside three chief executives of money deposit banks, disclosed that banks’ total credit to both public and private sectors, including individuals, is between N13 trillion and N14 trillion.

According to her, three per cent of banks’ total credit portfolio was non-performing (between N390 billion and N420 billion respectively). Tokunbo explained that the action was being initiated to recover the non-performing loans (NPL) because the allowed regulatory threshold is five per cent and the threshold would not be allowed to grow beyond the current three per cent level.

“Last month, we gave all bank customers who had defaulted in servicing their loans a grace of three months to do so or face being blacklisting. Today at the Bankers’ Committee meeting, we reaffirmed that decision,” she said.

“Therefore, by August 1 this year, any customer whose loan is not being serviced would have his name published and thereafter blacklisted. We have advised banks to go back and discuss with their customers to avert the public disgrace and blacklisting. We are taking this action because we would not allow NPLs to go beyond five per cent any longer.”

The Chief Executive Officer of UBA Plc, Mr. Philip Oduoza, said that as part of efforts to ensure the true identities of bank customers through biometrics registration, 12.5 million customers have so far got the Banks Verification Number (BVN). According to him, the development will place banks in good stead to verify the true identities of their customers, particularly as it relates to granting of credit.

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  • Dolamu Dolamu

    It makes sense to publish the list of Bank Debtors, despite the fact that all those debts are supposed to have been backed up by collateral. But then what is wrong with the Federal Debt Management Office (DMO) publishing the list of Local Contractors that Federal and State Governments are owing? I am not even talking about the ones political parties are owing because that is the headache of those contractors; doing business with individuals and organisations without making sure they have the capacity to pay. Can anybody imagine the number of business people that have been sent to their early grave or lying on their sick beds, hopefully not death beds, who are owing banks for loans obtained to do business with governments? This is more so because there has just been a change of governments in many States and as we all know current governments do not see debts they inherit as priority. Why do Nigerians think the fuel scarcity lingered on for so long? It was because refusing to make further importation as a way of forcing the Federal Government to pay the petroleum marketers for debts already owed was the only option they had at their disposal.

    The culture of governments not meeting their debt obligations must stop. How can the economy of any country grow with all sorts of rubbish that happen in our polity?; all, one aspect of the corruption in our system or the other. The Buhari administration, like any other, has a lot to contend with to clean up the Aegean stable.

  • Kehinde

    The debtors should also get ready to publish list of bank officials that got kick-backs in the provision of the credit facility.