House C’ttee Seeks Amendment to BOFIA Act to Curb High NPLs

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James Emejo in Abuja
There are indications that the House of Representatives Committee on Banking and Currency will this week move for an amendment of the Banks and Other Financial Institutions Act (BOFIA) on the floor of the House.

The bill, which would be introduced for the first reading, seeks to among other things, curtail current excesses and insider abuses which have led to increased portfolio of non performing loans (NPLs) in banks.

The Chairman of the committee, Hon. Jones Chukwu Onyereri (Imo,  PDP), told THISDAY he believed the bill would be a game changer that would sanitise the industry.

He said even though the banks are said to be healthy, the ratio of non-performing loans are higher and unprecedented.
Onyereri said the amendment would forbid anyone including a director or managing director from borrowing “a kobo” from any bank without paying back as there’ll also be a limit to which “you can borrow from a bank that you are also part of the ownership.”

Onyereri said: “If in 2009, we’d a banking crisis due to the high level of non performing loans, it’s also worrisome that at this point in time,  even after the intervention, we still have the non performing loans.

“And that’s why as a committee, we’ve taken it upon ourselves and as a matter of fact, the Speaker,  I believe will be signing on our amendment of BOFIA, which will come up as first reading on the floor of the House.

“And I believe that’ll change everything in the banking sector because it doesn’t make sense when you have insider abuse because that’s the crux of why we have this high non performing loans in the banks and we need to put a stop to that.”