Banking
Nigerian Senate Discusses Bill to Punish Loan Defaulters
By Dipo Olowookere
One of the major headaches of banks in Nigeria is the recovery of loans to customers and because of this, many of them are reluctant to grant credit facilities.
It was only recently financial institutions were forced to issue loans to their customers when the Central Bank of Nigeria (CBN) mandated them to meet a loan-to-deposit ratio of 60 per cent and later to 65 per cent.
The interpretation of this CBN policy is that 65 per cent of a bank’s total customer deposits must be given out as loans. Failure to adhere to this directive attracts fines from the apex bank. A few of them have been sanctioned for this infraction.
The idea behind this, according to the central bank, was to ensure that funds are made available to the real sectors of the economy, especially the manufacturing, the SMEs and others, so as to spur economic activities and boost the nation’s gross domestic product (GDP).
The banks reluctantly adhered to this instruction and those who failed were punished, but the issue of loan recovery was not fully addressed despite the rise in credit bureau agencies in the country.
But to strengthen the financial system and ensure quick loan recovery process, the Senate is looking to come up with laws that would punish loan defaulters.
On Tuesday, a bill for an act to establish a unified scheme for a sound financial system passed second reading at the Senate and was referred to the committee on banking insurance and other financial institutions for scrutiny, with a mandate to report back in four weeks.
According to the sponsor of the bill, Mr Sani Musa, when passed into law, banks would have the authority to track loan defaulters’ account in any financial institution in the country through the Bank Verification Number (BVN).
When this is done, the bank would be empowered to recover the loans from the bank account of the defaulter.
He further said the law will provide penalties for breaches and violations of obligations, thereby enhancing the loan recovery process across banking sectors in Nigeria.
“Before the deregulation of our banking system, the ability of our banks to recover loans has been the bedrock behind the collapse of many commercial banks with a dire consequence to many innocent account holders, which have resulted in the collapse of their businesses, loss of savings and even death.
“In many instances, most economies have consequently experienced high level and increasing rates of unemployment as a result of such negligences of the credit system.
“Today, the situation in Nigeria has become very serious and seemingly intractable and thereby frustrates our effort as a nation toward private driven economy as well as economic diversification and growth.
“In light of the above, there is only one obvious option left for any country where policy measures failed, which is to urgently enact legislation that will address the problems once and for all,” Mr Sani submitted.
Speaking further, the lawmaker described lending as the core business of commercial banks, noting that if they are unable to grant loans because of a bad recovery process, the nation’s economy might suffer for it.
“Credit is seen as the bloodstream of the banking business [and] the [current] situation in Nigeria demands an injection of a healthy bank credit and recovery system that will effectively fasten the pace of growth,” he added.
In his contribution, his colleague at the red chamber, Mr Tolu Odebiyi, said, “I think this is a very timely bill and it will safeguard our economy and creditors from defaulters.”
On his part, the Deputy Senate President, Mr Ovie Omo-Agege, who presided over the session, applauded the sponsor of the bill, stating that, “Clearly, there are challenges in the sector that we need to address and this bill seeks to do just that.”
By Adedapo Adesanya
Nigerian tier-1 lender, First Bank, has announced the introduction of its Naira Visa Debit Card in partnership with the global payments giant to extend accessible, reliable electronic payment capabilities to a broader segment of the Nigerian population.
The card is targeted at everyday consumers who require a dependable payment instrument for routine domestic and international transactions. Accepted across POS terminals, ATMs, and online platforms through Visa’s payments network, the Naira Visa Debit Card is designed to reduce friction for customers transitioning from cash to electronic payments across retail, utilities, and digital commerce.
According to the bank, the partnership aligns with Nigeria’s ongoing drive toward a cashless economy, a policy direction that has gained significant momentum following successive Central Bank of Nigeria directives encouraging the adoption of electronic payment channels, adding that the card is intended to serve customers across the country’s diverse economic segments.
The Naira Visa Debit Card is available to all eligible FirstBank account holders through any of the bank’s branches nationwide.
Speaking on the launch, Mr Chuma Ezirim, Group Executive, eBusiness & Retail Products, FirstBank, said: “Everyday transactions should be simple, secure, and rewarding. The Naira Visa Debit Card is designed to make life easier for our customers, whether they are paying for groceries, settling utility bills, or shopping online.
“By extending reliable electronic payment access across Nigeria, we are helping more people transition confidently from cash to digital payments, supporting the nation’s cashless policy and empowering communities with greater financial inclusion.”
Commenting on the strategic importance of the partnership, Mr Andrew Uaboi, Vice President and Cluster Head, West Africa, Visa, noted: “A strong payments ecosystem works for everyone. The Naira Visa Debit Card extends reliable electronic payment access to everyday Nigerian consumers, and this in addition to the cards in our portfolio, continues to demonstrate what a truly comprehensive card portfolio looks like for the Nigerian market. Visa is proud to power this offering with FirstBank.”
The launch of the Naira Visa Debit Card broadens Visa’s card portfolio at FirstBank, which already includes products spanning credit cards and High-end premium lifestyle spending cards. The addition completes its offering across customer segments, ensuring that cardholders at every income level have access to a product suited to their needs.
By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has unveiled the fourth edition of its Foreign Exchange Manual as part of efforts to deepen liquidity, improve transparency and strengthen confidence in the country’s foreign exchange market.
Speaking at the launch of the revised manual in Abuja on Friday, the Governor of the apex bank, Mr Yemi Cardoso, said the document will take effect from June 1, 2026.
He said it was developed after extensive consultations with banks, exporters, importers, corporates, regulators and development partners.
He said the new framework reflects the apex bank’s commitment to modernising the country’s foreign exchange administration in line with international best practices.
Mr Cardoso described the foreign exchange market as a critical pillar of any open economy, noting that effective governance of the sector is essential for sustaining macroeconomic stability and investor confidence.
“Foreign exchange is more than a financial instrument. It anchors price stability, facilitates the flow of goods and capital, and shapes investor sentiment,” he said.
The CBN governor stressed that the revised manual became necessary due to changing global economic realities, domestic reforms and the need for a more coherent and forward-looking regulatory framework.
According to him, the last edition of the FX manual was issued in 2018, making the latest review both timely and necessary.
Mr Cardoso disclosed that Nigeria’s foreign exchange market has witnessed significant improvement in liquidity since the current administration began reforms in the sector.
He added that daily turnover in the FX market increased from an average of about $100 million in the early days of the administration to between $400 million and $600 million daily.
The CBN Governor added that the market had also recorded transactions of up to $1 billion per day on several occasions in recent months.
“We have gone from a situation where it was more or less a one-way market, where the central bank came in, intervened and went away, to a much more dynamic market,” he stated.
The apex bank boss noted that the reforms were gradually restoring confidence among investors and market participants, encouraging freer entry and exit in the market without unnecessary restrictions.
He also maintained that the nation’s foreign reserves should not be used as the primary tool for funding the foreign exchange market.
“Reserves are reserves. They are not what you look to fund a market,” he said.
The CBN Governor assured stakeholders that the revised manual would be distributed free of charge to authorised dealers while the bank strengthens monitoring mechanisms to ensure compliance, fairness and accountability across the foreign exchange market.
On his part, the Deputy Governor for Economic Policy, Mr Muhammad Abdullahi, said the review formed part of broader reforms initiated by Mr Cardoso to restore confidence, improve transparency and deepen liquidity in the foreign exchange market.
Mr Abdullahi explained that the revised manual introduces several changes aimed at improving ease of doing business and reducing transaction bottlenecks.
Among the notable changes, he noted, are provisions allowing unfettered access to export proceeds, the introduction of non-resident investment accounts and operational guidelines for Pan-African Payment and Settlement System (PAPSS) transactions to support regional trade.
Mr Abdullahi added that the manual also contains new provisions on service exports, revised documentation requirements and updated operational procedures designed to align Nigeria’s FX market with global standards.
He said the apex bank deliberately adopted an ease of doing business approach during the review process to eliminate inefficiencies and ambiguities identified by stakeholders.
“The revised manual is not a stand-alone exercise but part of a broader institutional reform effort designed to strengthen the integrity, credibility and effectiveness of Nigeria’s foreign exchange system,” he said.
By Aduragbemi Omiyale
The Central Bank of Nigeria (CBN) has approved the appointment of Mr Julius Omodayo-Owotuga to the board of First Bank of Nigeria Limited as an executive director.
A statement from the company said the appointment of Mr Omodayo-Owotuga became effective on Wednesday, May 13, 2026.
He was appointed to the board of the subsidiary of First Holdco Plc to further strengthen its leadership capacity across strategic finance, governance, risk management, and institutional transformation.
Before now, he served on the board of First Holdco as a non-executive director between 2021 and 2026.
The appointee brings to the board 24 years of experience spanning banking and financial services, infrastructure finance, power, oil & gas, and audit and consulting.
His appointment, according to the notice to the Nigerian Exchange (NGX) Limited, reflects the Bank’s continued commitment to strong governance, disciplined execution, financial resilience, and sustainable long-term growth.
He most recently served as deputy chief executive of Geregu Power Plc, Nigeria’s first listed power generation company, where he played a pivotal role in institutional transformation, governance strengthening, capital market positioning, operational optimisation, and major financing initiatives, including the company’s landmark listing on NGX.
Mr Omodayo-Owotuga previously served as group executive director, Finance & Risk Management at Forte Oil Plc (now Ardova Plc), where he was instrumental in the company’s financial and operational transformation, leading strategic restructuring, capital raising, treasury optimisation, enterprise risk management, and governance improvement initiatives that strengthened long-term shareholder value.
His professional career also includes roles at Africa Finance Corporation, Standard Chartered Bank, KPMG Professional Services and MBC International Bank (Now First Bank Nigeria Limited), providing him with deep experience in institutional finance, treasury management, financial controls, regulatory engagement, and corporate advisory.
Mr Omodayo-Owotuga is a CFA Charter Holder, KPMG-trained Accountant, and a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN), the Chartered Institute of Taxation of Nigeria (CITN), and the Institute of Credit Administration. He is also a member of the Institute of Directors (IoD) Nigeria and a Certified Management Accountant.
He holds a Doctorate in Business Administration, a Master’s in Business Administration and a Bachelor’s degree in Accounting. He is an alumnus of Saïd Business School, University of Oxford, IE Business School, Geneva Business School, and the University of Lagos.
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