The Central Bank of Nigeria and other lending institutions have agreed to seize the bank savings of customers that borrow money and refuse to pay back. They agreed that the deposits in the customers’ other banks’ accounts should be used to service the unpaid loans.
This was part of the resolution at the 345th Bankers Committee meeting which took place in Lagos on Monday. At the meeting, the bankers decided that bank borrowers would be made to sign an agreement that if there was a default, the bank would have a right to access the borrowers other accounts. The bankers also decided that vital information should be demanded from bank borrowers such as Bank Verification Number, Tax Identification Number among other documents.
During a press briefing after the meeting, some of the bankers who spoke said that this was necessary to boost lending in the small and medium enterprises’ sector. They also said it was necessary to assist the Deposit Money Banks to maintain a minimum Lending and Deposit Ratio of 60 per cent by September 30, 2019. The Deputy Governor, CBN, Aishah Ahmad, said the banks’ appetite to lend had been curtailed by some customers’ wilfully refusing to pay their loans. She noted that, this should not hinder honest borrowers from having access to loans.
Asides from using collateral, she said the banks were exploring other means such as using credit scores of the bank customers. While speaking of efforts to ensure the 60 per cent Loan to Deposit Ratio target was achieved by September 30, she said it was also ensuring that the non -performing loans did not rise in the banking sector. The Managing Director, Guaranty Trust Bank, Segun Agbaje, said, banks would soon start giving out more loans to the retail sector because they were important to grow the economy.
“If you don’t pay the loans you collected from a bank, we will use your deposits in other banks to service your loans,” he said, The Managing Director, Access Bank, Herbert Wigwe, said the Bankers Committee was increasing its lending to the creative sector. He said the banks were partnering with Lagos State Government and working out a structure to increase its lending to the entertainment sector among others. Punch
Pix: CBN Governor, Godwin Emefiele