Loan Defaulters to Forfeit Savings in Other Banks – CBN

Central Bank of Nigeria (CBN), has issued a new directive whereby loan defaulters will forfeit their savings in other banks, in order to settle their debts. Aishah Ahmad, deputy governor of the CBN made this disclosure to newsmen while speaking at the Bankers Committee meeting.

She said, “We are not unaware of the challenges/reasons why credit has not been growing. Part of that was the appetite of banks to lend especially when you have customers that willingly refuse to pay their loans.” In this respect, we have come up with a new clause that will be included in the offer letters that will be granted going forward.”

“This is going to be a credit risk protection clause. Basically, it will contain the BVN details and TIN of the customers and more or less it will be a commitment on the part of the customers that you agree that should you default on the loan, the total amount of deposits you have across the banking industry would be applied towards repaying the loan.”

“This is not uncommon because banks already have rights of set-off within a bank. Which means you take money from a bank, the bank usually has a clause in the letter that allows your bank to repay your loan from the assets you have with the bank. This is just extending it across the industry.”CBN