The Nigeria Deposit Insurance Corporation (NDIC) has warned banks against concealing insider-related offences, particularly questionable lending practices, saying such actions could weaken the financial system and contribute to bank failures.
The corporation said it was prepared to invoke the criminal enforcement provisions of the Banks and Other Financial Institutions Act (BOFIA) against financial institutions and individuals found to have violated the law.
NDIC Head of Legal, Oladipo Kushimo, gave the warning during a breakout session, titled “Too Big to Fail?”, at the ongoing Nigerian Bar Association Annual General Conference in Port Harcourt.
Kushimo said the regulator had encountered instances in which financial institutions failed to properly disclose or expose misconduct involving insiders.
He warned that covering up such violations could undermine efforts to maintain a stable and sustainable banking system.
According to him, effective prevention, regulation and supervision are critical to protecting the integrity of the financial sector, adding that NDIC would pursue individuals and institutions whose actions threaten the stability of the banking system.
He said the corporation’s statutory criminal enforcement powers would be deployed where necessary to address regulatory breaches and suspected criminal conduct.
Kushimo also appealed to lawyers, bank employees and other stakeholders to provide information about insider abuse, assets linked to suspected wrongdoing and other activities that could threaten financial stability.
He said information about properties, software or other assets associated with bank directors or insiders could help regulators investigate suspected misconduct and protect depositors.
The NDIC official stressed that the corporation’s responsibilities extend beyond protecting depositors, noting that those responsible for compromising banking operations must also be held accountable.
He said greater cooperation among regulators, financial institutions, professionals and members of the public would strengthen efforts to detect insider abuse and safeguard the integrity of Nigeria’s banking system.
