EFCC chairman warns Nigerian banks against issuing loans without verifiable collateral
via Punch Nigeria2 min read
The Chairman of the Economic and Financial Crimes Commission EFCC, Mr. Ola Olukoyede, has cautioned Nigerian banks against granting loans without credible collateral, stating that such practices often lead to insider abuse and non-performing loans. Olukoyede issued this warning during a visit from Mufutau Abiola, the Chief Audit Executive of First Bank Plc, to the Commission's Lagos Zonal Directorate 2 in Ikoyi. Speaking through the Acting Zonal Director, Lagos Zonal Directorate 2, Ikoyi, Bawa Kaltungo, Olukoyede expressed concern over lending practices where loans are backed only by personal guarantees, including those of top executives, which he deemed inadequate and a risk to depositors' funds. He emphasized that banks are custodians of depositors' funds and that granting loans without adequate collateral is equivalent to tampering with these funds. He urged banks to strengthen their due diligence processes for customers to prevent loan defaults, even when due diligence is outsourced. Olukoyede reaffirmed the EFCC's commitment to collaborating with banks in combating financial crimes and requested that financial institutions promptly release staff for investigations into alleged financial misconduct. Abiola, from First Bank Plc, thanked the EFCC for the engagement, aiming to strengthen collaboration, and requested the EFCC to expedite investigations involving bank staff and others.
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