Senate Considers Bill to Blacklist Insolvent Debtors

Senate Considers Bill to Blacklist Insolvent Debtors

On Tuesday, the Senate passed a bill on its second reading to allow banks to recover loans after defaults, add them to a watchlist, and possibly blacklist them without the help of borrowers.

The bill, sponsored by Senator Sani Musa, aims to pass legislation establishing a single blueprint for a robust financial system that will foster and improve a repayment culture by allowing a bank of creditors to track defaulted debtors.

Musa said lending banks would be able to do so using the defaulting bank’s control number.

He said the law would allow lender banks to collect the aforementioned loans from other accounts managed by insolvent parties, without having to go to the borrowers.

He also said the bill includes penalties for breach of obligations and improves loan repayment in the Nigeria banking sector.

Musa noted that the heart of the financial system of any country is commercial banks, because they have the potential to use the entire weight of credit lines for the development and growth of the country’s economy.

He said that credit is viewed as the circulatory system of banking that lubricates the wheels of development.

He said: “The current situation in Nigeria requires a healthy bank infusion and recovery system that will effectively accelerate growth.

“Nevertheless, every lender from time to time finds himself with loans, the risk of loss of which exceeds the expected one.

“Don’t forget that before the deregulation of our banking system, our banks’ ability to repay loans was the cause of the collapse of many commercial banks.

“The principles behind this bill are to facilitate and improve the culture of repaying loans, make it easier to repay loans, and even make a list of frequently visited borrowers to track and blacklist.”

Senate Vice President Ovi Omo-Agege, who presided over the plenary session, referred the bill to the Senate Committee on Banking, Insurance and Other Financial Institutions for a second reading.

Source: – Punch ng

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