Contrary to insinuations in some quarters, the Central Bank of Nigeria (CBN) new policy regime mandating banks to go after customers who default on the repayment of their loans by seizing their deposits in other accounts is backed by law.
Speaking with a cross-section of experts at the weekend, they said the CBN Act, 2007 as amended, empowers the apex bank to issues guidelines and directives to persons and institutions under its supervision.
Firing the first salvo, Mr. Lawrence Agboola Jompe, a member of the Chartered Institute of Bankers of Nigeria, Lagos Branch, said, “The forfeiture order is legally binding, because it is the regulatory body of the country’s financial sector. This is because the CBN has been empowered by the Act that established it.”
Jompe, who is the Chief Executive of Victleo Investment Ltd, while noting that the CBN pronouncement is not a law of the parliament, however said that it carries the weight of the law, whether it is gazetted or not as long as it is the financial regulatory authority in the country.
Echoing similar sentiments, Babatunde Fabian, a public affairs analyst, said the CBN has the right legal framework to so mandate the banks.
He cited Section 45 subsection 5 and 6 of the CBN Act, to back his claims. Besides, he said, the apex bank has power to prohibit any bank which fails to comply with any directive issued under this section, from extending new loans and advances and from undertaking new investments, until the bank complies with the directive to the satisfaction of the Bank.
It would be recalled that the apex bank took the decision to blacklist loan defaulters at the end of the 345th Bankers Committee meeting in Lagos penultimate Monday.
The meeting presided over by Deputy Governor, Financial Sector Surveillance, CBN, Mrs. Aisha Ahmad, alongside, Chief Executive Officer, Access Bank, Mr. Herbert Wigwe, Chief Executive Officer, GTBank, Mr. Segun Agbaje, Chief Executive Officer, Unity Bank, Mrs. Tomi Somefun, and the Director, Banking Supervision, Alhaji Abdullahi Ahmed, agreed 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.
He disclosed that that to complement this initiative, the Bankers Committee will develop a credit scoring system which will enable people with good credit history to easily access loans. “If your score is high, you will be able to access credit easily. That is the whole idea. So thereabout, you are going to have a good credit scoring rate or position to be able to access credit. If you are not clean, you won’t be able to access loan.