Shareholders of First Bank of Nigeria Ltd. have tasked the Central Bank of Nigeria (CBN) on policies that would guard against insider-related borrowings by bank directors in the industry.
They disclosed this in an interview with our reporter on Friday in Lagos, while reacting to the apex bank’s action on FirstBank.
Dr Farouk Umar, President, Association for the Advancement of the Rights of Nigeria Shareholders said that 90 per cent cause of bank failure was due to non-performing loans related to insider credit.
Umar said the apex bank should come up with policies that would prevent directors from borrowing from the banks they acted as directors in order to protect shareholders and depositors.
Umar said the CBN action of dissolving the directors of FirstBank would be a lesson to all operators in the banking sector.
He added that regulators should compel banks and companies to report any regulatory query in their annual reports, for shareholders to ensure directors’ compliance.
Umar urged the new directors of FirstBank to stop insider related credit to boost confidence and protect investments.
Also speaking, Mrs Bisi Bakare, National Coordinator, Pragmatic Shareholders Association of Nigeria, commended the apex bank for restating the bank’s Chief Executive Officer, Dr Adesola Adeduntan.
Bakare urged Adeduntan to continue with his good works and transformation agenda in the bank.
“He should not allow the distraction to pull him down, he should continue with the good works he has been doing,” she said.
Mr Boniface Okezie, National Coordinator, Progressive Shareholders Association of Nigeria said the action would serve as a lesson to the Boards of other banks.
Okezie said the apex bank’s action and decision would enhance corporate governance among bank directors.