Banks

By Ngozi Onyeakusi—The Central Bank of Nigeria (CBN) has issued a directive stopping banks from writing off loans extended to their directors and associates without its approval. The directive is contained in the Corporate Governance Guidelines for commercial, Merchant, non-interest and payment service banks. This is coming after shareholders had constantly laid complaints about the continued rise in the number of insider-related loans to directors. The new guidelines, which took off on August 1, 2023, stated that any director whose facility or that of his related interests underperforms for more than one year should cease from being a board member while adding that such a director shall also be blacklisted from sitting on the board of the bank or any other financial institution supervised by the apex bank. The CBN also directed banks to come up with a Code of Business Conduct and Ethics containing information and practices necessary to buoy their integrity. According to the apex bank, the code should also take into account the legal obligations and reasonable expectations of their stakeholders as well as the responsibility and accountability of individuals reporting unethical practices.