The Central Bank of Nigeria (CBN) has mandated the immediate resignation of directors of financial institutions who have been implicated in the approval of non-performing insider-related loans. The decision comes as part of ongoing efforts to strengthen the banking sector, ensure financial stability, and promote transparency in the management of banks.
In a statement released today, the CBN emphasized its commitment to safeguarding the integrity of the financial system and protecting the interests of depositors, shareholders, and other stakeholders. The bank stated that the continued issuance of non-performing loans (NPLs) linked to insiders is a severe breach of regulatory guidelines, undermining the sector’s stability.
The Central Bank’s directive follows the identification of a number of senior bank executives whose actions have contributed to the growing concerns surrounding the volume of NPLs. These insider-related loans, typically granted to related parties without proper risk assessment or adequate collateral, have adversely impacted the health of several banks in the country.
As part of its enforcement, the CBN has called for the resignation of any bank director found responsible for the approval or facilitation of these loans. The move seeks to hold individuals accountable, uphold ethical standards, and instill confidence in the Nigerian banking sector.
“The Central Bank will not tolerate any actions that put the stability of our financial institutions and the economy at risk,” said Godwin Emefiele, the Governor of the Central Bank of Nigeria. “We are committed to a transparent, accountable, and stable banking system, and we will take all necessary steps to protect the integrity of our financial markets.”