Reps to probe banks over insurance fees on loans

The House of Representatives, on Thursday, urged the Central Bank of Nigeria (CBN) to direct Nigerian banks to stop collecting insurance fees on loans granted to customers.

The House also mandated its committee on Banking and currency to investigate the alleged anomalies of the shady deals of banks on insurance fees being charged on loans granted to customers, and report back to the House within four weeks for further legislative action.

The House resolution was sequel to a motion moved by Honourable Ayeola Abdul-Kabir.

In his motion, the lawmaker noted that apart from collateral taken from borrowers to secure the loans granted to them, commercial banks charge a heavy sum, which is as much as one and half per cent.

According to him, “The payment of insurance fees on loans is an additional burden on borrowers and serves as one of the factors discouraging many businessmen from taking bank loans to grow or expand their businesses,” he said.

“There is a need to make access to loans easier for borrowers in order to ensure increased production, which is one of the ways of revitalising the economy that is presently in a parlous state.”

When the motion was put to vote, it was supported by majority of the members in attendance.