The Senate on Tuesday, passed for second reading, a bill to allow banks recover loans from defaulters, place them on watchlist and eventually blacklist them without recourse to the borrowers.

The bill sponsored by Senator Sani Musa, is seeking an Act to establish a unified scheme for a sound financial system that will facilitate and improve credit repayment culture by empowering creditors bank to track loan defaulters.

Musa said the creditor banks would be able to do so through the means of the defaulters’ Bank Verification Number.

He said the bill would empower the creditor banks to recover the said loans from other accounts operated by the defaulters without recourse to the loan borrowers.

He also said the bill would provide penalties for breaches and violation of obligations and enhance loan recovery across banking sectors in Nigeria.

Musa noted that the core of financial system of any country is the commercial banks because they have the potential to apply the full weight of credit facilities for the development and growth of the country’s economy.

He said credit is seen as the bloodstream of the banking business, which oils the wheels of development.

He said, “The situation of Nigeria today demands an injection of healthy bank credit and recovery system that will effectively fasten the pace of the growth.

“However, every lending institution finds itself from time to time with loans of which the risk is loss is greater than anticipated.

“Lest we forget, before the deregulation of our banking system, the ability of our banks to recover loans has been the reason behind the collapse of many commercial banks.

“The principles behind this bill is to facilitate and improve credit repayment culture, streamline loan recovery and as well as watchlist frequent loan defaulters with a view to track and blacklist them.”

The Deputy President of the Senate, Ovie Omo-Agege, who presided over the plenary, referred the bill to the Senate Committee on Banking, Insurance and other Financial Institutions, for second reading.

Source:- Punch ng