By Tony Obiechina ABUJA
The Central Bank of Nigeria (CBN) said on Tuesday that it has put in place new policy initiatives and strategies to ensure that bank debtors no longer escape from sanctions.
The CBN Director, Banking Supervision Department, Hassan Bello, stated this in a paper titled “State of the Nigerian Economy and Implications for the Stability of the Banking System” delivered at the ongoing workshop for Business Editors and Finance Correspondents Association of Nigeria (FICAN), in Yola.
The workshop, with the theme: “Nigerian Banking System Stability: Tackling Emerging Issues” was organised by the Nigeria Deposit Insurance Corporation (NDIC).
Bello explained that the strategies were meant to encourage lending and safeguard the loans given out to borrowers to the extent that no borrower from one bank will abscond to another bank to borrow without first of all paying back the initial loan.
According to him, “We also did what we call Global Standing Instruction (GSI) such that addresses this issue of non-performing loans, delinquent or perennial debtors.
“Now, what we did in the system which is going to work towards the stability of the financial and banking system is that so long as you have a deposit in a particular bank; and for instance you have N1 million deposit in Zenith Bank, and you went and borrowed N1.5 million in Union Bank; and then you leave that one and go to Standard Chartered bank for another N1 million; yes it is the same BVN being used.
“The new GSI is that so long as you have money in any bank, the Bank you’re owing can take it straight because by the time you’re signing that for that loan, you’re signing the GSI form. They will not even consult you. You just see debt alert from Zenith Bank.”
In his paper, “Emerging Issues in the Regulation and Supervision of Banks in Nigeria”, the Director, Bank Examination Department, NDIC, Mr Tayo Babatolu enumerated some policy measures taken to stimulate economic growth programmes.
These, according to him, include, the introduction of sustainable banking principles, code of corporate governance, implementation of a common financial year-end for banks, and increase in the deposit insurance cover for bank depositors for N500,000.
Also speaking, CBN Director of Financial Policy and Regulation Department, Dr Hassan Mahmoud, predicted an improvement in the GDP growth target over that of the third quarter growth rate of 2.28 per cent.
He said, “If you are looking at the 1.1 per cent that we did in 2015/2016, and 2.28 per cent that we did in the third quarter of 2019, we will see that we have really moved substantially.
“It is difficult to sustain positive rate GDP growth rates that we are projecting that by the fourth quarter of 2019. We are going to be doing 2.38 per cent, that is CBN projection, the IMF is projecting same growth of 3.31 per cent”.
He, said that it was the responsibility of CBN and NDIC to ensure that customers were not ripped off by the excesses of some bankers.
