Loans: NDIC bar debtors from accessing new facilities in deposit money banks

By Etuka Sunday

All debtors of Closed Banks with non-performing loans of a maximum of N250 Million have been barred from access to new facilities in deposit money banks.

The Managing Director and Chief Executive of the Nigeria Deposit Insurance Corporation (NDIC), Alh. Umaru Ibrahim disclosed this at the recently concluded NDIC 2014 Bank Examiners’ Conference in Lagos.

Alh. Ibrahim said following the Corporation’s request the CBN took the action in order to tackle the challenge of recovering debts owed to closed banks some of which have remained unrecovered since 1994. He added that the names of debtors will be populated through the CBN’s Credit Risk Management System (CRMS) and approved private sector credit bureaus.

Alh. Ibrahim said the theme of this year’s conference “Sustaining a Safe and Sound Financial System through Effective Banking Supervision” aligns with the Corporation’s mandate as a risk minimizing deposit insurer actively engaged in bank supervision, distress resolution and failed bank liquidation.

He said the objective of the conference was to update the knowledge and skills of examiners and to provide opportunity for supervisors, operators and stakeholders to brainstorm on topical issues that continued to shape the nation’s financial industry.

He added that the introduction of supervisory and financial reporting approaches such as the International Financial Reporting System (IFRS), Basel II/ III, Sustainable Banking and the implementation of Risk Based Supervision among others, has strengthened the regulatory system and has led to the improvement of risk management practices in banks.

However, he warned that the future of banking will be more complex in terms of product offerings using Information Communication Technology (ICT) and urged examiners to take up the challenges and be more proactive in appraising the affairs of banks.

Also speaking at the conference, the Executive Director Operations, NDIC, Prince Aghatise Erediauwa described the conference as a unique opportunity to initiate strategies to improve the effectiveness of the Corporation’s activities. He urged participants to critically analyse the challenges faced by examiners with a view to proffering the way forward in the Corporation’s supervisory role.