Non-performing loans worse now than 2008, 2010 — NASS
The National Assembly, (NASS), has warned of impending crisis in the banking sector over non-performing loans, (NPL), which it says is worse now than the one witnessed in 2008 to 2010.
The Chairman, House of Representative Committee on Banking and Currency, John Chukwudi Onyerere who made this known in an interview in Lagos, said there was need for the banking supervising agencies, Nigeria Deposit Insurance Corporation, (NDIC), and the Central Bank of Nigeria, (CBN), to arrest the situation from degenerating into a crisis.
Honourable Onyerere stressed the need for banks not to give loans without the relevant security and above the acceptable level.
He noted that the House on its part has amended the Banking and Other Financial Institutions Act, (BOFIA), because of insider abuse.
He stated: “The truth is that there is high level of non- performing loans which is worse than what we had in 2008 and 2010 and to me, it is just a matter of supervision.
“So, the banking supervision of different departments of NDIC and CBN will need to sit up but primarily it is the CBN because they are the main drivers, the main regulators to look at this because you don’t give out loans when you do not have proper securities, you do not give out loans beyond the acceptable levels, especially when it comes to insider abuse because that is the major cause which is against the BOFIA Act and that is why we have gone ahead to amend the Act in order to forestall further crisis.”
He also frowned at the predominance of bad N100 notes which he said was not good for the image of the country.
He stated: “There could be so many factors responsible for dirty N100 notes but the point that must be made is that the Nigerian Security Printing and Minting Company, NSPMC, keeps printing new notes and once the notes have been printed, it cannot be put to use because they are not yet currency until it gets to CBN.
“So, we directed that to CBN because we are not aware that they produce quite a picture of this great organization. But the normal excuse that the CBN would give is that people keep mutilating the naira note which I can understand because of our non-maintenance culture. So, for us as a parliament, we have told them in very clear terms that this is creating very bad image for the country.’’