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CBN to loan defaulters: Your deposits and assets will be seized across all banks

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CBN to loan defaulters: Your deposits and assets will be seized across all banks

Edwin Eriye

Loaning will not be business as usual as The Central Bank of Nigeria and other sister institutions have decided to seize the deposits of loan defaulters across the country.

This agreement was reached in the 346th Bankers’ Committee meeting held in Lagos on Monday were they concluded that all borrowers will be directed to sign an asset seizure agreement with their respective banks necessary to seize their deposits should they fail to repay the loan.

While in the meeting on Monday, Deputy Governor Central Bank of Nigeria, Mrs. Aishah Ahmed said that “At the last Monetary Policy Committee (MPC) meeting, we were concerned over the level of credit in the industry. We need to give out more loans to revitalize the economy, stimulate demand and serve the SMEs sector.

Deputy Governor Central Bank of Nigeria, Mrs. Aishah Ahmed

Deputy Governor Central Bank of Nigeria, Mrs. Aishah Ahmed

The CBN deputy governor said that the reason credit is not growing and banks are not willing to give out loans can be traced to the intentional refusal of lenders to repay their loans.

“We think that there are very many honest Nigerians that are willing to take loans, and repay their loans. But those who have refused to pay back their loans are affecting the chances of more people having access to loans. I am very optimistic that the policy will enable the banks lend more, and make all Nigerians have access to loans, especially SMEs”

Aishah Ahmed also disclosed that the new clause basically contains the customers Bank Verification Number (BVN) details; Tax Identification Numbers (TIN) and more

“It would be a commitment or covenant by the customer that in taking the loan, he also agrees and promises to repay.

In response to the new clause, Guaranty Trust Bank Plc Managing Director, Mr. Segun Agbaje stated that the rationale behind the new clause is to stimulate the economy through improved lending.

“Banks are now giving salary advance loans to customers. It is pure consumer credit. But after some people take loans they will abandon the account, and start doing business in another bank. The salaries will go to new banks. What is the CBN is saying is that if you do such a thing, they will pool the money in the other bank and use it to service your obligations”. Segun Agbaje.

CBN Director, Banking Supervisor, Adbullahi Ahmed also emphasized the need for banks to lend more, especially to the SMEs and also lauded the new clause as it now denies lenders the thought and option of not repaying their loans. 

 

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