The Central Bank of Nigeria (CBN) has directed bank directors with non-performing insider-related loans to resign immediately. Insider loans are credits extended to a bank’s executives, directors, employees, major shareholders, or related parties.
In a circular signed by Acting Director of Banking Supervision, Adetona Adedeji, the CBN emphasized the need for stronger corporate governance and risk management. To minimize financial risks, banks must recover debts by enforcing collateral and seizing the affected directors’ shareholdings.
The directive also mandates compliance with Section 19 of the Banking and Other Financial Institutions Act (BOFIA) 2020. Banks must regularize insider-related loans above the legal limits within 180 days, ensuring no individual director exceeds 5% of the bank’s paid-up capital and that aggregate insider loans remain within 10%. Loans with specific approval timelines must be settled within the permitted period.
