AMCON: Govt urged to expand debt recovery laws for banks

The Federal Government has been challenged to expand the laws that granted the Asset Management Corporation of Nigeria (AMCON) special debt recovery powers to include a national law for banks.

Barrister Oluwakemi Balogun of the firm of Oluwakemi LP,  while speaking at the training of Solicitors, Receivers and Receiver/Managers recently at a Eko Hotel, Lagos, said debt recovery in Nigeria will continue to burden AMCON as well as the financial sector as long as the system allows some Nigerians to brazenly walk into banks to borrow money with no intention to repay the loan obligation.

AMCON is steadily making remarkable recoveries but still has about 7,902 outstanding obligors with total outstanding loan of N3.142 trillion. Of this number, 350 of the agency’s obligors account for N2.053 trillion, which is above 65 per cent of total outstanding amount.

Balogun stated that the new law is expected to insulate the banking sector against reckless borrowers and recalcitrant debtors that AMCON is currently chasing for the recovery of trillions of naira.

AMCON has since inception in 2010, recovered over N1.4trillion and had at different phases from the year of its establishment purchased 12,743 NPLs or Eligible Bank Assets (EBAs) worth N3.8 trillion from 22 Eligible Financial Institutions (EFIs). Having watched such financial rascality for some decade, the Senior Advocate opined that something drastic must be done by the government to save the country.

Some Nigerians in the last 25 years, according to him, have perfected the act of going to different banks to borrow money and have serially defaulted in the repayment agreement because they country has no policy that guides such recklessness.

As a mitigant to such ugly development, he further said, “We need to have a national law that will assist lenders (banks and financial institutions). We must have a national policy. There must be a national law on debt recovery. This law should not just be for only AMCON as a government agency but for the nation as a whole. That is one of the ways we can curb the bad behaviour. In some other economies you cannot borrow money and refuse to pay back and go scot-free. Therefore, Nigeria should not allow recalcitrant debtors to go unpunished.”

AMCON CEO, Ahmed Kuru, said the agency had repeatedly made the point at every opportunity that all stakeholders must view the AMCON mandate as one of serious national importance.

“If at sunset AMCON is unable to recover the huge debt of over N5trillion, it becomes the debt of the Federal Government of Nigeria for which taxpayers’ monies will be used to settle,” AMCON CEO said.

Kuru, who was represented by Group Head of Asset Management, Benedict Daminabo, said “the implication is that the public will be made to pay for the recklessness of only a few individuals who continue to take advantage of the loopholes in our laws to escape their moral and legal obligations to repay their debts. As a matter of fact, we have reached a point in our country where all stakeholders (the federal government, the judiciary, the legislature and the public) must work together to fight the common enemy.”