• Monday, December 23, 2024
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Bill to recover bank loans passes second reading in Senate

Senate to probe allegations by Supreme Court Justices despite CJN’s resignation

The Senate will go-ahead to investigate the recent allegations by the Supreme Court Justices despite the resignation of Justice Tanko Muhammad.

A Bill seeking to track loan defaulters and recover the loans through any other bank accounts linked to them has passed the second reading at the Nigerian Senate.

The bill, if passed into law, allows banks to place defaulters on a watch list and eventually blacklist them.

It is sponsored by Sani Musa (APC Niger East). It is seeking an Act to establish a unified scheme for a sound financial system that will facilitate and improve credit repayment culture by empowering creditor banks to track loan defaulters.

Musa explained that the creditor banks would be able to do so through the means of the defaulter’s Bank Verification Number (BVN).

He also said the bill would provide penalties for breaches and violation of obligations and enhance loan recovery across banking sectors in Nigeria.

Musa noted that the core of the financial system of any country was the commercial banks because they have the potential to apply the full weight of credit facilities for the development and growth of the country’s economy.

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He said: “The situation of Nigeria today demands an injection of healthy bank credit and recovery system that will effectively fasten the pace of the growth.

“However, every lending institution finds itself from time to time with loans of which the risk is loss is greater than anticipated.

“In every lending environment, there are two types of borrowers– the good and the bad.

“Lest we forget, before the deregulation of our banking system, the ability of our banks to recover loans has been the reasons behind the collapse of many commercial banks.”

Musa noted that most economies had experienced a high increased rate of unemployment as a result of the negligence of the credit system.

He added: “Today, the situation in Nigeria has become very serious and seemingly intractable and thereby frustrate our efforts as a nation towards the private driven economy as well as economic diversification and growth.

“There’s a court judgement that gives banks the right to take back their money from defaulters from any of the banks where they have deposits. “The principle behind this bill is to facilitate and improve credit repayment culture, streamline loan recovery and as well as watch list frequent loan defaulters with a view to track and blacklist them.”

The deputy president of the Senate, Ovie Omo-Agege, who presided over the plenary, referred the bill to the Senate committee on banking, insurance and other financial institutions, for further legislative work.

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