The Economic and Financial Crimes Commission (EFCC) has warned Nigerian banks against granting loans without credible collateral, citing rising concerns over insider abuse and the growth of non-performing loans.
The caution was issued by the Commission’s Executive Chairman, Ola Olukoyede, during a courtesy visit by the Chief Audit Executive of First Bank of Nigeria Plc, Mufutau Olawale Abiola, to the EFCC Lagos Zonal Directorate 2 in Ikoyi.
Speaking through the Acting Zonal Director, Assistant Commander of the EFCC (ACE I) Bawa Usman Kaltungo, Olukoyede expressed concern over what he described as flawed lending practices within the banking sector. He noted that loans backed solely by personal guarantees—particularly those of top executives—lack sufficient security and expose depositors’ funds to risk.
“We have issues with banks’ mode of giving loans. The process often shows insider abuse,” he said, stressing that so-called “top-down loans” granted without verifiable collateral undermine financial discipline.
The EFCC chairman emphasised that banks, as custodians of public deposits, must uphold strict lending standards. According to him, issuing unsecured loans effectively amounts to jeopardising depositors’ funds and contributes significantly to loan defaults.
He urged financial institutions to strengthen due diligence processes for borrowers and ensure accountability, even where such assessments are outsourced. “There must be clear liability clauses in all due diligence arrangements,” he added.
Olukoyede also reaffirmed the Commission’s commitment to collaboration with banks in tackling financial crimes, calling for prompt cooperation during investigations, particularly in cases involving suspected insider complicity.
“When we invite your staff, you must release them so we can jointly address economic and financial crimes,” he said, adding that the Commission may escalate cases to international partners where necessary.
In his remarks, Abiola said the visit was aimed at reinforcing the existing partnership between the bank and the EFCC. He also appealed for the timely handling of investigations involving bank personnel and disclosed that the bank has designated a team to manage EFCC-related requests.
