NDIC Lack Manpower For Banks Debts Recovering says Ibrahim

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 The Managing Director/Chief Executive Officer, NDIC, Umaru Ibrahim

From Benjamin a ameh, Lagos

There is need to focus on challenges faced by examiners in appraising banks.

The Managing Director/Chief Executive Officer, NDIC, Umaru Ibrahim, stated this in a keynote address presented at the 2014 bank examiners’ conference held in Lagos.

Ibrahim noted that the Corporation continues to face the challenge of debt recovery in terms of the debt owed the closed banks. Some of such debts, Ibrahim disclosed “remain unrecovered since 1994.”
The NDIC boss further pointed out that the challenges of lending in the Nigerian environment include, corporate governance, impact of fixed income securities on the financial position of deposit money banks and technological innovations such as mobile money payment remains topical.

In addition, he calls for more focus on challenges faced by examiners in appraising banks for total banks debts recovering in future.

In response to questions, NDIC boss disagreed with the statement that the future of banking would be more complex in terms of product offerings due to latest Information Communication Technology (ICT), saying it provides a compelling reason for examiners to be proactive saying that “you will agree with me that radical reforms have taken place in the banking industry since the last Examiners’ Conference in 2011. One of such reforms is the implementation of Risk-based Supervision which has led to significant improvement in risk management practices by banks.

“Supervisory and financial reporting approach such as macro prudential supervision, sustainable banking, International Financial Reporting Standards, Basel 11 and 111 and consolidated supervision have also been substantially implemented in the bid to strengthen the system.”

The objective of the conference was to update bank examiners’ knowledge and skills in contemporary supervisory toolkits for delivering their mandate.

For instance, the apex regulatory in the industry had in 2012 barred banks in the country from extending further credit to 113 companies and 419 directors/shareholders.

The CBN had arrived at the decision then as a result of the reluctance of the debtors to pay back their loans despite the purchase of the debts at an agreed price by the Asset Management Corporation of Nigeria (AMCON).

Furthermore, in a move aimed at strengthening financial stability and instilling discipline in the banking sector, the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) jointly banned all debtors of closed banks that had non-performing loans (NPLs) of a maximum of N250 million from accessing new facilities in any deposit money bank in the country.

Ibrahim said banks management had been notified of the development, however, declined to uncover the affected customers, saying that their names would “be populated through the CBN’s Credit Risk Management System (CRMS) and approved private sector credit bureaus.

 


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