Adedapo Adesanya
By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has called on the Senate to enact a law creating a Credit Tribunal which will help tackle Non-Performing Loans (NPLs) in the country.
The apex bank made the demand on Wednesday in Abuja at a public hearing organised by the Senate Committee on Banking, Insurance and Other Financial Institutions on its Bill for an Act to repeal the Banks and Other Financial Institutions Act (BOFIA) 2004 and re-enact the Banks and Other Financial Institutions Act 2020.
The bill sponsored by Mr Uba Sani (APC – Kaduna Central) and Mrs Betty Apiafi (PDP – Rivers West) has since passed the first and second reading.
The CBN noted that the country’s NPL was currently over N1 trillion and it has affected that financial institutions and in turn, taking a toll on the nation’s economy.
According to the Director, Legal Services, Mr Kofo Salam-Alada, the primary objective is to create an efficient regime for the recovery of eligible loans of banks and Other Financial Institutions (OFls) and enforcement of rights over collateral securities.
“Several new types of licensed institutions have entered the Nigerian financial services sector since the enactment of the 1991 Act. These include the non-interest banks, credit bureaux, payment system service providers, among others.
“There is a compelling need to introduce new provisions in the bill to address the unique peculiarities of these institutions.
“We noted that the powers of the CBN to intervene in the process of managing a failing bank and reinstatement of a bank in a grave situation and bring it back to sound financial health was omitted in the bill,” he said.
In another move, the apex bank also lobbied for the power to be able to freeze accounts of identified criminals and their collaborators.
He urged the upper legislative chamber to reinstate the powers of the CBN Governor to apply to the court for orders to freeze accounts which are deemed to be linked with criminal and other civil infractions.
