Banks In Dilemma On How To Get Back Loans From Politicians Who Lost Reelection

That the Central Bank of Nigeria ordered commercial banks to publish names of bank delinquent debtors (individuals and companies) with non-performing loans and that have also reneged from servicing their credit facilities is no more news. In fact, the action has caused several upheavals beyond the imagination of the apex bank hitherto.

Some Chief Executives who felt stunned and aggrieved that their names were published on the pages of newspaper as bank debtors, have sought redress in court-a development that has further plunged the banks into legal battles.

This has been a very sensitive matter that will for a long time attract thoughtful debate. Meanwhile, CBN has indicated, in fact, threatened that unless and until the debtors meet their obligations in relation to their outstanding loans, they will be barred from participating in the foreign exchange transactions and Government Securities markets.

The CBN clearly stated that ‘publish and shame debtors’ initiative was not to witch-hunt or blacklist any individual or company but to open window of opportunity for the debtors to clear their credit facilities for better performance of the banks.

Reports have it that some of the debtors have made move to do the needful act in a bid to clear their names off the debtors list.

But, many are of the opinion that the entire exercise will not achieve the intended objective. It will be an uphill task to get the true delinquent debtors’ list published. It was gathered that the lists published by banks only consist of names of entrepreneurs who depend solely on bank loans to stay afloat in business. Hence the possibility of respecting the status quo after their names make public sphere.

But what could be said of botched politicians like the federal and state lawmakers who could not return into house after they lost seat to opposition during the 2015 general elections? How will banks recover the debt they collected through the influence of their political offices?

According to our research, most of these lawmakers secured credit facilities from banks to acquire luxuries and to fund their campaign prior and during the elections. But they didn’t achieve their ambitions.

Sources said majority of the erstwhile federal lawmakers have written to banks not to publish their names, promising to pay their debts but how will they pay when they have taken politics as full-time job. Now, that they failed during the election, it would be difficult for them to fulfill their promises without the salaries or allowances.

Realistically, no bank, no financial institution, that wants to compete with other banks, and with any other financial intermediaries favourably, and hope to perform its economic role better than its competitors, will do exactly what CBN has directed the banks to do, regardless that the apex bank’s order was meant, on the surface, to serve the best interest of the banks.