Efcc urges banks to tighten loan collateral requirements
The Chairman of the Economic and Financial Crimes Commission, Ola Olukoyede, has cautioned Nigerian banks about the risks of issuing loans without credible collateral. During a meeting with Mufutau Abiola, Chief Audit Executive of First Bank Plc, the EFCC emphasized the dangers of insider abuse and non-performing loans. The agency stressed that loans backed only by personal guarantees are insufficient and put depositors’ funds at risk. The EFCC also called for stronger due diligence and cooperation from banks in financial crime investigations.
What we know
- Ola Olukoyede warned that granting loans without verifiable collateral leads to insider abuse and non-performing loans.
- The EFCC stated that banks should not rely solely on personal guarantees, even from top executives, when issuing loans.
- Banks were urged to strengthen due diligence processes and ensure liability clauses when outsourcing these checks.
- The Commission requested that banks promptly release staff for investigations, especially when insider involvement is suspected.
- Mufutau Abiola highlighted the importance of collaboration and asked the EFCC to expedite investigations involving bank staff.
