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.
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.
RipplesNigeria …without borders, without fears
Join the conversation
Support Ripples Nigeria, hold up solutions journalism
Balanced, fearless journalism driven by data comes at huge financial costs.
As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.
If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.
Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.
INVESTIGATION: Inside UNILAG’s multi-million naira budgetary abuse and academic discord
The University of Lagos located in Nigeria’s commercial capital, Lagos, has been embroiled in controversies with allegations bothering on misappropriation of...
SPECIAL REPORT: Displaced residents of Zamfara battle hunger, as underfunding derails Nigeria’s nutrition goals
On paper, Muhammad Zayyanu is seven years old. The quiet boy who looks shorter for his age could not recollect...
INVESTIGATION: N7.3bn paid for unnamed projects; how Nigerian govt spent N2.2trn in six months
Analysing nearly 3,000 payments made by various Federal Government Ministries, Departments and Agencies (MDAs) over the previous six months (January...
INVESTIGATION… Delay rocks Nigerian govt’s promise of N30,000 covid-19 relief for artisans, others
Before the outbreak of the COVID-19 pandemic in February, 2020, Chukwudi Okoroigwe’s daily earnings as a bus driver was hardly enough to cater to the...
INVESTIGATION… Ten years after, communities count losses as AfDB, Cross River govt abandon road project
Ten years after the Cross River State government and African Development Bank (AFDB) jointly awarded the Yahe-Wanokom-Wanikade-Benue border road for...