Worried by the huge Non-Performing Loans (NPLs) in the banking sector, House of Representatives Committee on Banking and Currency yesterday called on the Central Bank of Nigeria (CBN) to rise to its regulatory role in addressing it.

The NPL ratio for the banking industry is currently put at 10.1 percent, which is far above the prudential regulatory limit of 5 percent.
The committee, which visited the Lagos office of the CBN on oversight function, admitted that a substantial part of the NPLs had been insider abuse within the financial system.
Led by James Onyereri, chairman, the committee called on the CBN to wield the big stick against the culprits as a deterrent to others in the system, adding that the apex bank should improve its supervision to curb insider abuse.
However, the committee called for increased lending to the real sector, which he said would engender growth and pull the country out of the looming recession, while also charging the apex bank on increased consumer protection, stressing that customers’ deposits must be protected from unnecessary charges and fraud so as not to lose public confidence in the Nigerian financial system.
The committee called for a synergy between the fiscal and monetary authorities towards a strong financial system and for the growth of the nation, and stressed the need for the CBN and the Ministry of Finance to work together.
“If we work on the monetary policy without an agreeing part on the fiscal side, then it becomes an issue. For us as a committee, we are wondering if it is not necessary for us to set up a financial services commission where we will have monetary and fiscal authorities converge,” the committee chairman said.
At the end of the oversight function, the House Committee chairman, commended the CBN on its efforts at ensuring stability in the financial industry, saying it “has shown sound organisational prowess and effective management.”