Banks Seek Police Nod To Declare Debtors Wanted

Enitar Ugwu, 05 July 2011 the guardian

RECALCITRANT bank debtors are in for a rough deal if feelers from the nation’s financial sectors are anything to go by.

Reason: Banks in the country at the weekend submitted to the police names of debtors they suspected have the means to pay up their debts but have simply refused to do so out of seer impunity as well as those who obtained loans with fake forwarding addresses or debtors who switched addresses without notify the banks accordingly, for a nationwide crackdown.

As part of this development, the banks have also sought police permit to declare these categories of debtors wanted in the media.

Sources in the banking sector told The Guardian that the police would soon publish the pictures, names and submitted addresses of such debtors in some national dailies.

According to the Central Bank of Nigeria (CBN), non-performing loan in the banking sector, especially in the eight rescued banks, is above N1 trillion.

Also, ahead of the pronouncement of the Asset Management Corporation of Nigeria (AMCON) that it would soon terminate all existing contracts banks had with debt recovery agents, the banks and such agents have resorted to the massive deployment of police personnel to recover some of such debts.

Managing Director, AMCON, Chike Obi, last week in Lagos hinted that the corporation would terminate all existing contracts banks had with debt recovery agents, adding that it would re-appoint only those who had been transparent and thorough.

Obi also disclosed that AMCON would soon unveil its new policy on debt recovery.

His words: “We are going to announce our debt collecting formula to the world.”

Apparently owing to that policy pronouncement, most banks mid last week held meetings with their debt recovery agents to chart a way forward, The Guardian learnt.

One of the outcomes of the meetings was the decision by the banks to send their officials to the office of the Special Fraud Unit at Ikoyi, Lagos, requesting police to help recover the debts.

Last week, the AMCON chief also acknowledged that the corporation had acquired 90 per cent of all non-performing loans in the banking sector.

Speaking with The Guardian on effective debt recovery strategy, Chief Executive Officer, Debt Recovery Institute and Managing Director, First Stallion and Associates Limited, Akintunde Opeodu, noted: “Banking crisis is not all about credit, but the ability to recover loans. Banking credit administration has been poor in the country with its ‘man-know-man’ arrangement. Nigeria banks are wonder banks, as facilities are not really given to the business public.”

Opeodu also stressed that “except priority is given to debt recovery, non-performing loans will continue to be the major challenge of banks in Nigeria. Competent hands must also be placed on the right seats. Priority must be given to who is in credit and debt recovery department. In many countries of the world, banking is not all about lending out credit, it is also about being able to recover the principal facility and interest.”