Banks To Deploy Legal Powers For Debt Recovery

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Following a major decline of loan recovery in the first quarter of 2019, banks have commenced new processes to secure legal powers with a view to strengthening the loan recovery.

 

According to Financial Vanguard, when the financial records of 10 banks were analyzed, it indicated a decline of about 47 percent in Q1'2019 and in Q1'2018 it dropped from N5.8 billion to N3.1 billion.  

 

Though the banks attributed the decline to the recent general elections and quiet nature of economic activities in the Q1, however, experts have credited it to the legal system, yuletide season as well as unwillingness habit of debtors to repay loans.

 

The banks include Guaranty Trust Bank, Union Bank, Wema Bank, UBA, FBN Holdings, Stanbic IBTC, Zenith Bank, Access Bank, Sterling Bank, and Fidelity Bank.

 

The legal powers the banks plan to deploy are similar to that of the Asset Management Corporation of Nigeria (AMCON), which would give the banks the power to execute temporary foreclosure on assets of debtors or debtor's company and also the directors of the companies and their families.

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