BOFIA Amendment to Ensure Stiff Sanctions, Says Lawmaker


Obinna Chima in Washington DC

The Chairman of House of Representatives Committee on Banking and Currency, Hon. Jones Onyereri, on Monday reacted to the concerns over the rise in non-performing loans (NPLs) in Nigerian banks raised in the World Economic Outlook released by the International Monetary Fund (IMF).

Onyereri, said in a chat with journalists on the sidelines of the IMF/World Bank meetings that members of the legislature were taking steps to amend the BOFIA to ensure that bank executives found wanting are severely punished.

According to him, “That was why the government introduced Asset Management Corporation of Nigeria (AMCON) and that was why we have touted the idea that we won’t allow AMCON two. They need to solve that problem and if you look at what we are doing especially in the House of Representatives, we are amending the BOFIA Act and what we are trying to achieve is to curb as much as is within reasonable limits the whole idea of NPLs.

“The core of NPLs is because of insider abuse. You know as you have in the BOFIA at present that the directors are meant to disclose whatever investment they have in the bank or outside even before they become directors of the bank, but none of this is being followed.

“They give themselves loans far more than the accepted value and we have tried to do is to increase the punitive measure. What we have at present in the BOFIA is a situation where if there is any infraction, they pay as little as N100,000 or N1000 and any bank can afford that if they have to pay N1000; it means nothing to them. “But now we have increased it to the extent that thinking about committing such infractions will be scary to anybody that intends to do so.

“If you know that you need to pay as much as N20million a day for everyday that you continue to have that infraction, you won’t dare do any of those things. So, we are trying to deter them not that we are so much interested in punitive measure and we are doing that.

“The good news is that we have done the public hearing and in less than a few weeks we will come out with the report. Once the act is signed into law, it will reduce this idea of non-performing loans.”