Guaranty Trust Bank (GTBank) has made headlines in Nigeria for taking legal action against 60 top executives from 13 commercial banks.
This move stems from an ongoing dispute with Afex Commodity Exchange (Afex) over a N17 billion loan connected to the Central Bank of Nigeria’s Anchor Borrowers’ Programme.
Understanding the Anchor Borrowers’ Programme:
The Anchor Borrowers’ Programme is a government initiative designed to boost agricultural production in Nigeria. Participating banks provide loans to farmers through accredited processors and input providers like Afex.
The Dispute and Court Case:
GTBank alleges that Afex failed to repay a N17 billion loan obtained through the Anchor Borrowers’ Programme. The bank initiated court proceedings against Afex and its principal officers. Additionally, GTBank reportedly obtained a No-Debit-Order on Afex’s accounts held across 13 banks.
Why The Bank Chiefs Are Involved:
The 60 bank chiefs named in the suit are facing contempt of court charges for allegedly failing to implement the No-Debit-Order placed on Afex’s accounts. This suggests that GTBank believes these banks did not comply with the court order to freeze Afex’s funds.
Further Developments:
The court has also granted GTBank permission to take control of 16 Afex warehouses located across seven states. The bank is authorized to sell the commodities stored within these warehouses to recover the outstanding loan amount.
Key Takeaways:
- This case highlights the potential challenges associated with loan recovery in the Nigerian banking sector.
- It underscores the importance of adhering to court orders for financial institutions.
- The outcome of this case could have wider implications for the Anchor Borrowers’ Programme.