New Regulation to Make Loan Defaulters Pay with Deposits in other Banks

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The Central Bank of Nigeria and other lending institutions have agreed to seize the bank savings of customers that borrow money and refuse to pay back, Punch Newspaper reported.

They agreed that the deposits in the customers’ other banks’ accounts should be used to service the unpaid loans.

This was part of the resolution at the 345th Bankers Committee meeting which took place in Lagos on Monday.

At the meeting, the bankers decided that bank borrowers would be made to sign an agreement that if there was a default, the bank would have a right to access the borrowers other accounts.

The bankers also decided that vital information should be demanded from bank borrowers such as Bank Verification Number, Tax Identification Number among other documents.

During a press briefing after the meeting, some of the bankers who spoke said that this was necessary to boost lending in the small and medium enterprises’ sector.

They also said it was necessary to assist the Deposit Money Banks to maintain a minimum Lending and Deposit Ratio of 60 percent by September 30, 2019

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