Unegbu tasks banks on management of post COVID-19 debts

Unegbu also advised the operators of the banking industry to stay away from litigation or any form of legal processes in resolving dispute with their customers.

Speaking in Webinar  organized in Lagos by  Finance Correspondents Association of Nigeria (FICAN) with theme: COVID-19 and the Future of Banking, Mazi Unegbu who is a former President of the Chartered Institute of Bankers of Nigeria (CIBN) and former bank Chief Executive Officer  said banks should avoid litigation and sort out themselves through mediation.

“I think this is the viable way to go about it. Banks should tell their debtors something about their plans on managing the interest rate on facilities they have given to them.

“All parties, including the banks and their customers, have been adversely affected by the COVID-19 pandemic. There is no exception. But I expect banks to sit down with their clients and find out ways to enable them to launch back and then settle their indebtedness,” he said.

He suggested that banks should offer their debtors a moratorium on the principal and at least 50 per cent reduction on the interest rates.  Banks should get mediators instead of being legalistic,” he said.

According to him, the future of banking in the post COVID-19 era is  digital operation and strong partnership with Fintech companies that would yield enhanced service deliveries to their clients.

Withhim, other features of the banking in the post pandemic environment include  enhanced cyber security, widening of financial inclusion, improved lending and creation of credits, mortgage financing and staff training.

“Banks should encourage the evolution of mortgage firms that can offer facilities with repayment period of between 10 to 25 years. They should also provide adequate training to their staff on critical areas banking operations and relationship with clients rather than harping on deposits mobilisation alone,” he said.

Unegbu expressed hope that Nigeria should witness a “U” curve rather than a “W” curve in the management of the COVID-19 pandemic.

He pointed out that the “U” curve would enable the country to exit the pandemic once and for all while a “W” curve would mean another resurgence of the pandemic after the current experience, which he said, would be very devastating to the economy.

Unegbu also said Nigeria should encourage, through the banking sector, the promotion of product incubation that would promote local manufacturing rather than relying on importation. “We should stop living on denial. We have seen it happen during the Biafra-Nigeria war how Biafra produced most the things it needed within its boundaries,” he said.