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NDIC reads riot act to bank directors

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NDIC reads riot act to bank directors

Following what it described as “an increase in volume of non-performing insider loans|” in Nigerian banks, the NDIC says it is devising a new approach in tackling the development.

The Nigeria Deposit Insurance Corporation also confirmed that Skye Bank, is one of many banks that extended loan facilities to its directors without due process.

The corporation’s Managing Director, Alhaji I. Ibrahim, told stakeholders at a meeting with officials from the Chartered Institute of Bankers of Nigeria (CIBN) at NDIC’s office in Abuja on Friday that the agency is very concerned about the issue.

He lamented, that if allowed to persist, such a situation has severe consequences, including leading to instability of the nation’s banking system.

Read also: Militancy, oil theft account for 1,447 pipeline attacks in 2016 – NNPC GMD

Experts said such loans are usually given by banks to their directors and shareholders upon demand, while playing down criteria for such loan advancement.

Ibrahim said: “there is the urgent need to return to strict compliance with the existing code of conduct and a review of the existing laws and regulations to provide stiffer penalties for directors, who take advantage of their positions and fail to pay back their loans.”

It would be recalled that earlier this month, the CBN replaced the board of Skye Bank after it failed to meet minimum capital ratios, saying the bank’s non-performing loan ratio had been above the regulatory limit for some time.

Similar action was taken against ailing banks between 2007 to 2009 in the heat of global financial crisis in which the apex bank sacked nine banks’ CEOs.

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