The Central Bank of Nigeria, CBN, has sacked a number of bank directors following cases of insider abuse relating to non-performing loans, the Director, Banking Supervision, NDIC, Mr. Adedapo Adeleke said.
Mr. Adeleke, disclosed this in a presentation on the topic: ‘Curtailing the growth of non-performing loans in banks, at a training workshop organised for financial journalists by the agency in Kano on Friday.
He did not give details of the directors and the banks affected.
He cited this as one of the outcomes of measures that the regulators had been taking to reduce the growth of bad loans in the financial services industry.
Adeleke stated, “We have the Code of Corporate Governance and Code for Bank Directors. You sign these codes before you become a director. It is part of the employment terms. One of the things in these codes is that if you are having a non-performing loan, it is a ground to remove you from being a director.
“Some banks have also included this clearly in their Memorandum of Association. So, this is the stand of the regulator in terms of the NPL by a director and it is being enforced. Maybe the regulator has not been dramatic in publishing the names of those that have been removed.”
He said these were part of the measures regulators had taken to address the spate of the NPLs among banks.
According to him, banks’ huge exposure to the oil and gas sector has led to higher NPLs following the decline in oil price in 2014.
He said although the situation had improved, there was a need for the banks to work harder on their capital as higher NPLs had caused erosion of capital and deterioration in their asset quality.
Adeleke recalled that some foreign rating agencies had recently commenced the downgrade of some Nigerian banks over issues traceable partly to asset quality.
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