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Nigerian Banks on Brink of Collapse—EFCC Raises Alarm

Acting Chairman of the Economic and Financial Crimes Commission (EFCC), Mr Ibrahim Magu, has raised an alarm over the health of some Deposit Money Banks (DMBs) operating in the country.

According to him, some banks in Nigeria were on the verge of collapsing because of huge non-performing loans (NPLs).

However, Mr Magu, who spoke in Lagos on Thursday during an interactive session with Association of Chief Compliance Officers of Banks in Nigeria (ACCOBIN), said the anti-graft agency was ready to “assist the banks in recovering their debts.”

The EFCC chief urged compliance officers of banks in Nigeria to be more diligent in their responsibilities, as a way of tackling money laundering and other fraudulent practices in the sector.

He said compliance officers in various banks in Nigeria must also take ownership of the fight against corruption, which he described as one of the problems bedevilling the banking industry.

“We need to find a common ground to work together. You have a responsibility to fight corruption.

“The Commission is ready to partner with you to ensure a healthy economy.

“We are ready to assist the banks in recovering their debts, but compliance officers must ensure due diligence, especially when giving out loans to customers.

“I know you sometimes need to protect some of your customers. But it is sometimes better that you do without some of these people; otherwise, you will be seen as conspiring with them to steal public funds,” he said.

Mr Magu further charged banks’ compliance officers to always provide the commission with necessary information to assist it in carrying out its responsibilities, adding that “We must work together to save this country. Most of the banks are sitting on water. In fact, some of these banks are almost collapsing.

“I know there are questions you can’t ask, particularly it involves some individuals, but if you give us information on such people, we will move in. If there are fundamental issues that can affect your banks, you can give us the information, especially as another general election approaches.

“I don’t want to be charging banks alongside suspected criminals because doing so can wreak havoc on the economy. It will even discourage investors from coming to the country.”

The anti-graft boss, who stressed that there is the need for concerted efforts to save the banking industry, added that “every bank is capable of going distressed, no matter its size. That is why we are battling to see that you stay afloat.”

Mr Magu also expressed concerns about the concept of private banking in Nigeria, which he said could be abused by politically exposed persons.

He, therefore, urged the group to look very critically into the issue, saying, “There must be due diligence, even in this practice of private banking. There must be accountability; there must be transparent in our transactions. You don’t have to wait until anything goes awry before you begin to find a solution to it.”

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