More cans of worms is set to be opened as 10 more commercial banks plan to obey the Central Bank of Nigeria (CBN) directive that mandated them to publish the list of their chronic debtors.
Already, 10 banks have unveiled the list of their respective debtors , but have only accounted for less than N165 billion of the total bad debts put at about N546 billion as at March 2015.
The amount accounted for by the nine banks does not include the debts below N50 million owed the financial institutions.
Going by the figure, there are about N384 billion, representing about 70 per cent, left for the 10 banks to account for their individual contribution to the toxic asset in the system.
Banks yet to publish include First Bank, Access Bank, Citi Bank, Ecobank, First City Monument Bank, Keystone, Standard Chartered, United Bank for Africa, Unity Bank, and Wema Bank.
Meanwhile, Access Bank Plc yesterday, listed 11 defaulters in its bad book, amounting to about N3.7 billion, with three of the highest debtors- Boika Ventures Limited, MCLATEK Nigeria Limited and LOC Metals and Minerals Limited, owing more than N2.65 billion.
The ‘name and shame’ exercise for chronic bank debtors may have brought new indications about the failure to imbibe corporate governance by directors of banks, leading to about N546.02 billion bad debts in the industry.
Besides, it has also emerged that some directors, who sponsored various businesses with different names, aided the loan processes from banks where they work, as well as obtained loan from rival banks.
A top banking industry source, who spoke to The Guardian on condition of anonymity, said majority of the directors have private businesses for which they have promoted in part or wholly and when it comes to financing, they as well give information and aid the process of loan, even in competing banks, but remain totally at large.
The Central Bank of Nigeria had last April, mandated banks to publish the names of their respective chronic debtors, as a prompt for them to pay up.
But in the build up to the deadline of July 31, 2015, given to debtors, some of the financial institutions revealed that some of the debtors responded, while others were seeking for the restructuring of their portfolios.
Managing Director and Chief Executive Officer of Financial Derivatives Limited, Bismarck Rewane, said the development was a welcome one as it would now help to reduce delinquent loans as well as fight impunity in debt accumulation by bank customers.
According to him, the exercise will bring about a change in the culture of borrowing without paying, especially with the public exposure that comes with the publication and subsequent restrictions from the regulatory authority.
He however, noted that the challenge now lies with identifying those that are unable to pay because of the changing business environment and those that are unwilling to pay out of impunity.
Rewane, who admitted that banking relationship is confidential, said that it cannot be kept hidden when people’s borrowing turns bad and tends towards risking the existence of the institutions.
Lead Director of Centre for Social Justice, Eze Onyekpere, said the measure is placing additional burden on banks as they incur cost for publications, although litigation would also cost them too.
While expressing fangs over the unwillingness of some borrowers to pay back, he was in support of other measures that involved the blacklisting of the companies and their promoters from access to the foreign exchange and further credit facility in the system.