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FRC Probes Banks Over Violation Of Lending Conditions To States
The Fiscal Responsibility Commission (FRC) has vowed to deal with banks that give loans to governments and agencies without following due process.
It also warned the state governments to reduce fiscal deficits, build revenue surplus and ensure effective resource allocation and prudent debt management.
The Chairman, FRC, Victor Muruako, spoke during the two-day fiscal transparency and accountability sensitisation workshop in Lagos on Monday with the theme ‘Fiscal transparency and sustainable development at the sub-nationals’.
He said, “As for banks and other financial institutions that make themselves willing tools of fiscal carelessness by granting loans to some sub-national governments without regard to due process, the commission hereby reminds them that Section 45(2) in Part X of the Fiscal Responsibility Act 2007, which specifies conditions for borrowing by ‘any government in the federation or its agencies and corporations’, reads as follows: ‘Lending by banks and financial institutions in contravention of this part shall be unlawful.’
“In line with the foregoing, the commission hereby serves notice to defaulting banks and other financial institutions that the window of just using moral suasion is closing. Going forward, we intend to invoke the provisions of the law against this expressly defined unlawful act, wherever it rears its head.
“Where FRA, 2007 appears inadequate to compel, we shall aggressively invoke our collaborations with sister agencies such as the ICPC and EFCC.”
The chairman renewed the commission’s appeal to all states and local governments in the country to take up the challenge of achieving the five objectives in the fiscal sustainability plan upon which were predicated the Federal Government’s ‘bailout loans’ to states in 2016.
“We also wish to use this opportunity to discourage the bad habit of some subnational governments to make loans their first and last consideration for meeting revenue shortfalls rather than considering ways of harvesting their dormant potentials for internally generated revenue,” he said.
Muruako said the event was organised as part of a series of zonal sensitisation campaigns on transparency, accountability and prudence in public finance management.
The Nigeria Inter-Bank Settlement System (NIBSS) has said that Bank Verification Number (BVN) enrolments rose by 6.8 per cent year-on-year to 67.8 million as at December 2025, up from 63.5 million recorded in the corresponding period of 2024.
In a statement published on its website, NIBSS attributed the growth to stronger policy enforcement by the Central Bank of Nigeria (CBN) and the expansion of diaspora enrolment initiatives.
NIBSS noted that the expansion reinforces the BVN system’s central role in Nigeria’s financial inclusion drive and digital identity framework.
Another major driver, the statement said, was the rollout of the Non-Resident Bank Verification Number (NRBVN) initiative, which allows Nigerians in the diaspora to obtain a BVN remotely without physical presence in the country.
A five-year analysis by NIBSS showed consistent growth in BVN enrolments, rising from 51.9 million in 2021 to 56.0 million in 2022, 60.1 million in 2023, 63.5 million in 2024 and 67.8 million by December 2025. The steady increase reflects stronger compliance with biometric identity requirements and improved coverage of the national banking identity system.
However, NIBSS noted that BVN enrolments still lag the total number of active bank accounts, which exceeded 320 million as of March 2025.
The gap, it explained, is largely due to multiple bank accounts linked to single BVNs, as well as customers yet to complete enrolment, despite the progress recorded.