Non- performing insider loans worry NDIC

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  • Corporation calls for stiffer sanctions

The Nigeria Deposit Insurance Corporation has expressed concern over the increasing wave of non-performing insider loans in various banks and its consequences on the stability of the nation’s banking system.
The Managing Director/Chief Executive of the Corporation, Alhaji Umaru Ibrahim, said, while receiving the newly elected President & Chairman of Council of the Chartered Institute of Bankers of Nigeria, Professor Segun Ajibola and some of his Executive Members who paid a courtesy visit on the NDIC Senior Management in Abuja that situation had become worrisome.
Ibrahim said the development had posed credibility questions capable of eroding public confidence in the banking system, calling for strict compliance with the existing code of conduct and a review of the existing laws and regulations to provide stiffer penalties for directors who take advantage of their positions and failed to repay their loans.
The NDIC CEO observed that a situation where casual staff accounted for about 25 per cent of the banking industry workforce, such a development would have a negative impact on the industry.
He also noted with concern the practice in some banks where sensitive were assigned to casual staff, thereby exposing the banking industry to incidence of fraud and forgery..
Speaking on the recent staff rationalisation embarked upon by banks, Alhaji Ibrahim urged the banks to exercise caution in order not to create industrial unrest in the industry.
He, therefore, called on the CIBN to intervene by advising its members on the aim of the rationalisation, which should be to weed out bad eggs from the industry.
The NDIC boss emphasized that the corporation would continue to partner with the CIBN and other professional bodies towards achieving effective capacity building among its staff.
Ibrahim disclosed that 77 members of staff of the corporation were currently undergoing the Bangor/CBMBA programme which commenced three years ago.
The Bangor/CB MBA programme is an initiative of the NDIC, the CIBN and the Bangor University, Scotland, where staff of the corporation undergo up to 24 months training programme and graduate with dual certification, an MBA and Chartered Banker of Scotland.
Fourteen members of staff, he said, had already graduated from the programme.
The NDIC boss further requested the CIBN to fast track the accreditation of the corporation’s Training Academy and the introduction of deposit Insurance System in the institute’s curricula, in order to broaden the scope of professionalism in the banking industry.
Responding, the President/Chairman of Council of CIBN, Prof. Segun Ajibola, expressed the appreciation of the institute to the corporation for positive contributions to its activities and programmes and audit support towards the establishment of the CIBN Bankers House in Abuja.
Prof. Ajibola also commended the corporation for its efforts in ensuring stability in the banking system.
The CIBN boss assured the NDIC MD/CEO that the accreditation committee of the institute would soon visit the corporation’s academy.
He however appealed to the NDIC boss on the need for further collaboration with the institute on training and other issues of mutual interest.
On staff casualisation in the banks, Ajibola pledged to table the matter at the CIBN’s next meeting with banks’ CEOs with a view to addressing the issues.
He stated that efforts were being made by the CIBN to enhance the capacity of bank staff, particularly in credit administration.