Delinquent Debtors Use Nigeria’s Judiciary To Thwart Recovery — Emefiele

Godwin Emefile, Governor of the Central Bank of Nigeria, said on Tuesday that obstinate debtors had exploited the Nigerian judicial system’s lack of prioritization of credit collection proceedings to thwart debt recovery operations by financial institutions in the country.

The governor made this known in Abuja during a training for judicial officers on recent banking and financial services reforms in Nigeria: Banks and other Financial Institutions Act, 2020 in Focus.

Emefiele, who was represented by Aisha Ahmad, Deputy Governor, Financial System Stability, emphasized the importance of the courts in preserving the CBN’s mandate and guaranteeing the financial system’s orderly operation.

Speaking about the importance of the BOFIA 2020, he stated that the act was intended to revitalize the Nigerian banking sector by establishing a healthy and stable financial system that would support the long-term growth and development of the Nigerian economy.

He added that the BOFIA 2020 enhanced the Framework for Combating Money Laundering and Terrorist Financing by requiring regulated firms to comply with AML/CFT and cybersecurity requirements.

“This comes at a very auspicious time as the country continues to advance in its adoption of digital economy, heralding the birth of Nigeria’s Central Bank Digital Currency – the e-Naira,” he added.

Emefiele also mentioned that the BOFIA had rules for successfully managing unclaimed cash or abandoned property in dormant accounts held by banks, specialized banks, and other financial organizations, as well as recovery instruments for failed banks.

“BOFIA 2020 also provides enhanced recovery and resolution tools for failing banks, specialized banks, and other financial institutions to prevent a systemic crisis, maintain financial system stability, and sustain depositor confidence,” he added.

“The Special Tribunal for the Enforcement and Recovery of Eligible Loans was introduced in the Act to accelerate credit recovery processes and collateral rights enforcement,” he explained.

“The Special Tribunal, in conjunction with the Bank’s Policy on Global Standing Instruction, will address the issue of non-performing loans, which has posed a significant threat to the Nigerian financial system.”

According to him, supervisory observance suggested that obstinate debtors had utilized the Nigerian legal system’s non-prioritization of credit collection issues to thwart debt recovery operations by financial institutions.

Emefiele went on to say that the apex bank was currently informally engaging key players in the judiciary in order to put the provision into action.

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