Managing Director of the Asset Management Corporation Ahmed Kuru has advocated for the return of the Failed Banks Tribunal (or Act). Kuru made this known when members of the Risk Management Association of Nigeria (RIMAN) paid him a visit.
In his view, reinstating the Act would enhance discipline in the banking industry.
From referees to debt collectors? : Kuru may be indirectly advocating for courts in the country to become debt recovery agents in the country.
A section of the degree empowered the tribunal to recover debts.
THE TRIBUNAL SHALL HAVE POWER TO RECOVER, IN ACCORDANCE IN ACCORDANCE WITH THE PROVISIONS OF THIS DECREE, THE DEBTS OWED TO A FAILED BANK, ARISING IN THE ORDINARY COURSE OF BUSINESS AND WHICH REMAIN OUTSTANDING AS AT THE DATE THE BANK IS CLOSED OR DECLARED
A FAILED BANK BY THE CENTRAL BANK OF NIGERIA
About the Failed Banks Decree: The Failed Bank Degree was promulgated in 1994 under the General Ibrahim Abacha regime. Sitting however commenced in July 1995. The Act created two tribunals: one to address malpractice in banks and the other to recover debt owed banks.
In 1999, the decree was amended and is now referred to as the Failed Bank (Recovery of Debts) and Financial Malpractices in Bank Act, Cap F2 Laws of the Federation of Nigeria, 2004.
The downside of the decree: While the decree brought some modicum of discipline to the banking space, critics argued that it trampled on the human rights of many of the individuals involved. A few of them were eventually found innocent.
Race against time: The AMCON boss may be considering a return of the seemingly extreme measures as the bad bank’s winding down draws closer. AMCON is billed to wind down operations in 2020, according to the law setting it up.
About AMCON: The Asset Management Corporation of Nigeria (AMCON) was established on the 19th July 2010, when the President of the Federal Republic of Nigeria signed the AMCON Act into Law.
AMCON was created to be a key stabilizing and re-vitalizing tool aimed at reviving the financial system by efficiently resolving the non-performing loan assets of the banks in the Nigerian economy.