The Nigeria Deposit Insurance Corporation (NDIC), has berated banks in the country, criminalizing their age-long practice of insider loans and stating readiness for the persecution of various offenses and negligent directors of failed banks.

The imposition of penalties and persecution of various offences, the NDIC said, is to serve as a deterrent to officers and directors of banks and will ensure that the banking industry ensures compliance with available laws and regulation.

The corporation also proposed the express prohibition of insider loans/criminalising insider loans by making it an offence punishable with imprisonment and fine for directors of licensed banks to obtain credit facilities from their own banks, whether such credit facilities are secured or not.

It observed that there is a need to make clearer the legal frameworks and clarification of roles of the NDIC and the Central Bank of Nigeria, CBN, as they carry out their supervisory mandates.

The Managing Director/CE, NDIC, Umaru Ibrahim, spoke during the Public Hearing for the Amendment of the BOFIA Act 2004 towards the Repeal and Re-enactment of the Bill to BOFIA 2020 organised by the Senate Committee on Banking, Insurance and Other Financial Institutions at the National Assembly in Abuja.

According to a statement by the Director, Communication and Public Affairs Department, Sunday Oluyemi, “Directors of banks should be held for they are personally liable without any limitation for the causes of the failure of their banks where they have been found to be negligent in managing the bank.

“The imposition of penalties and persecution of various offences to serve as a deterrent to officers and directors of banks and will ensure that the banking industry ensures compliance with available laws and regulation in order to avoid paying stiff penalties.”