Ndic proposes stiffer sanctions banks officials aiding non performing loans

The National Deposit Insurance Corporation (NDIC) has proposed stiffer sanctions for bank officials who aid or abet non-performing loans (NPLs) in the Nigerian banking industry.

According to a report by The Punch, the NDIC made the proposal in a circular to all deposit money banks, development finance institutions, and microfinance banks in the country.

The corporation said that the proposal is aimed at addressing the growing concern of NPLs in the banking sector, which has been a major challenge for the industry in recent years.

The NDIC defined NPLs as loans that are 90 days or more past due, and which are unlikely to be repaid in full. The corporation said that NPLs have been a major source of risk for banks, and have contributed to the decline in the overall health of the banking sector.

The NDIC proposed that bank officials who aid or abet NPLs should be subject to stiffer sanctions, including:

1. Suspension or termination of employment: Bank officials who aid or abet NPLs should be suspended or terminated from their employment.
2. Fines: Bank officials who aid or abet NPLs should be fined a significant amount.
3. Criminal prosecution: Bank officials who aid or abet NPLs should be prosecuted for criminal offenses.
4. Revocation of banking license: Banks that fail to comply with the NDIC's regulations and guidelines on NPLs should have their banking license revoked.

The NDIC also proposed that banks should establish a robust system for monitoring and reporting NPLs, and that they should provide regular updates to the corporation on the status of their NPLs.

The corporation said that the proposed sanctions are aimed at promoting a culture of discipline and accountability in the banking industry, and at ensuring that banks are able to manage their NPLs effectively.

The NDIC's proposal has been welcomed by some stakeholders in the banking industry, who say that it is a step in the right direction towards addressing the problem of NPLs in the sector.

However, others have expressed concerns that the proposed sanctions may be too harsh, and that they may have unintended consequences for the banking industry.

It remains to be seen how the NDIC's proposal will be received by the banking industry, and whether it will be effective in addressing the problem of NPLs in the sector.