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Expert says shaming of bank debtors is the way forward

By News Express on 06/08/2015

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A financial expert, Dr. Uche Uwaleke, on Wednesday commended the Central Bank of Nigeria (CNB) for directing commercial banks to publish the names of bad debtors in newspapers.

Uwaleke told the News Agency of Nigeria (NAN) in Abuja that when debtors were embarrassed, they would be forced to repay whatever they collected.

He said, “The idea of naming and shaming in my view will make this people at least seek ways of making repayment.

“This people had been given ample time to pay their debts and they refused to pay, so they do not have any excuse for noncompliance.

“I think the directive by the CBN is a step in the right direction, it is the way forward.”

On the refusal of banks to collect foreign currency from customers, Uwaleke said the measure would curb illicit flows of currency associated with Nigeria's banking sector.

He said the measure would reduce money laundering and shore up the value of the naira, especially in the black market.

“The margin between the official market rate of the dollar and the parallel market rate has been wide.

“The measure will in no doubt increase the supply of foreign exchange in the black market.

“Because if banks refuse to accept foreign currency deposits into domiciliary accounts, people who have them will be forced to sell or keep them at home and face the risk.

Uwaleke said the measure was commendable, noting that it had begun to yield the required results as the naira was beginning to appreciate in the parallel market.

“If you notice, we are already beginning to feel the effect because since the introduction of this measure, naira in the parallel market seems to be appreciating.

“Before this measure was taken, the parallel market rate was around N250 to the dollar but now the rate is between N209 and N210 with an official rate of N197.

“So we are seeing a situation where in the near future the margin will keep on narrowing down to bridge the gap.”

According to him, Nigeria has been said to be among the top 10 countries in the world with illicit flow of funds.

He said the measure would step up the value of the naira in the parallel market and also discourage illicit transfer of funds.

“It will discourage people who deposit foreign currencies in domiciliary accounts and the next day, they are wiring them into foreign accounts.

“I am sure that this measure will no doubt reduce money laundering.”

He noted that the appreciation of the naira could also be tied to the recent forex ban of some items by the CBN.

Uwaleke said depreciation or devaluation of the naira was not in the interest of the country and the CBN should continue to review its policies to address the economic situation.

“The CBN should continue to watch and react to circumstances as they arise.

“They should not also lose sight of the fact that there may be fall outs but I know that in the long run the increase in the value of the naira will cancel out some of those speculations. (NAN)

Photo shows CBN Gov. Emefiele


Source News Express

Posted 06/08/2015 05:02:11 AM





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