Loan defaulters to forfeit deposits in other banks – Bankers C’ttee

...New directive will boost consumer credit, others to honest loaners – CBN

…’Implementation of initiative may hike industry’s credit growth to N1trn’

In an effort to aid reduction of credit aversion by the banks and help banks that are yet to meet up with the required Loans to Deposit Ratio (LDR) of 60 per cent by September 30, the Bankers’ Committee has agreed that henceforth, loan defaulters will have to forfeit their deposit assets in other bank accounts to settle their debts.

The Bankers’ Committee, an umbrella body of the Central Bank of Nigeria’s (CBN) officials and managing directors of deposit money banks (DMBs), on Monday, explained that the forfeited funds will be used to service loans that have been defaulted on.

Speaking to the newsmen at the post bankers committee briefing in Lagos, the CBN’s Deputy Governor, Financial Services System, Aisha Ahmed, said this new directive will boost consumer credit, by making funds available to other honest loaners and in turn improve purchasing power to stimulate economic growth.

Ahmad, however, explained that the new offer letters will require the bank verification number (BVN) of the customers, while the customer will be made to sign a new clause that states: Funds in accounts with other financial institutions be used to service loans when default occurs.

She noted that by implementing this initiative, credit growth of N1 trillion is projected to be added to the industry.

On the drive to improve credit access to the creative industry, Herbert Wigwe, Chief Executive Officer, Access Bank Plc, said the bankers are collaborating with the Lagos State Government in a pilot agreement towards developing adjourning areas of the National Theatre.

He said the bankers’ agreement to support four key areas which are music, fashion, Nollywood and IT hubs is due to their significance on the economy and their ability to engage a lot of the Nigerian youths.

Nigerian Banks have recently succeeded in bringing down the ratio of industry non-performing loans (NPLs) to a single digit.

On whether the new directive won’t hamper progress already made with NPLs, the bankers noted that adequate credit scoring will be implemented on would be obligors.

Ahmed Abdullahi, director of banking supervision, explained that individuals will now be able to obtain credit scores, and the scores will help banks to rate obligors.

“If you are not creditworthy, you will not be able to access loans”, he said.

Meanwhile, the apex spokesperson, Isaac Okorafor, warned loan seekers and owners of small-scale businesses to beware of fraudulent loan offers purportedly by the Federal Government.

Okorafor, in a statement on Monday, noted that the masterminds of the fraud ask their potential victims to apply for loans provided by the Federal Government through an e-mail address.

The CBN statement reads: “The attention of the Central Bank of Nigeria (CBN) has been drawn to fraudulent messages in the social media circles requesting unsuspecting loan seekers and owners of small-scale businesses to apply for loans provided by the Federal Government through an e-mail address (empowermentcbnloan@gmail.com) purportedly being handled by the Central Bank of Nigeria (CBN).

“While the CBN, indeed, has several development finance intervention programmes from which different categories of businesses have benefitted (and still benefit), the bank DOES NOT do so through direct interaction with prospective applicants.

“For the avoidance of doubt, there are clearly spelt out procedures for accessing CBN intervention funds, which are disbursed through Participating Financial Institutions (PFIs), such as Deposit Money Banks (DMBs), Development Finance Institutions (DFIs) and Microfinance Banks (MFBs).

“Members of the public, particularly youth and owners of small-scale businesses are therefore advised to disregard any message requesting them to send their personal details, including mobile phone numbers, to emails such as empowermentcbnloan@gmail.com or any other one that may be contrived.

These messages are fake and anyone who enters into correspondence with them does so at his or her own risk.

“Prospective applicants are advised to approach their respective banks or the Central Bank of Nigeria (CBN) branch nearest to them for clarification on the procedure for accessing any of the CBN-related loans”, the apex bank stated.