The Nigeria Deposit Insurance Corporation (NDIC), which liquidated Heritage Bank loan defaulters, will soon publicize their names.
Also, the executives and board members found complicit in the bank’s collapse are to be blacklisted by the NDIC. The decisions, said a source in the corporation, would help enforce discipline and accountability in the financial sector of the Nigerian economy.
The “name and shame” strategy was designed to curb delinquencies and encourage a more responsible borrowing culture by bank customers. The source said: “Those who default on their loans can expect to be identified and potentially face significant reputational damage. Our name and shame policy is part of broader efforts to enhance accountability and transparency within the industry.
It is a necessary step to ensure that borrowers understand the consequences of their actions and to prevent similar situations in the future.” Under the amended NDIC Act, the corporation can prosecute any borrowers who default in paying their loan. If convicted, such borrowers would pay up to N10,000,000 fine or go to jail for five years, or both.
Errant corporate borrowers face even stiffer fines and additional daily penalties. Some sections of the Act state that: The corporation can blacklist bank executives and board members deemed responsible for the collapse of a financial institution. When blacklisted, such individuals will no longer hold similar positions in any other bank in the country; and NDIC can recover debts owed to failing or failed insured institutions. If an obligor neglects or refuses to repay a debt secured by a mortgage, the NDIC can take possession of and dispose of the property to satisfy the debt. This includes selling, transferring, or managing the property in question.
