The Central Bank of Nigeria (CBN) has directed bank directors with non-performing, insider-related loans to immediately resign from their positions.
Insider loans are credit facilities extended by a bank to its own executives, directors, employees, major shareholders or related parties.
The apex bank, in its efforts to strengthen corporate governance and mitigate financial risks, has issued a new directive mandating all commercial banks to regularise insider-related credit facilities that exceed statutory limits within 180 days, or face regulatory sanctions.
With this move, credit facilities for politicians, business elites, and other influential Nigerians must survive due diligence and other requirements before they are given.
In a circular signed by the bank, its Acting Director of Banking Supervision, Adetona Adedeji, on Monday, the CBN explained that the measure is aimed at enhancing corporate governance and bolstering risk management within the banking sector.
To curb financial risks, the apex bank instructed financial institutions to take decisive steps to recover outstanding debts. This includes enforcing collateral agreements and seizing the shareholdings of directors involved.
