Unsecure loans to politically exposed persons: Former Commercial Bank MD explains


February 27, 2019

Koroma by Dusuba

Former Managing Director of the Sierra Leone Commercial Bank(SLCB), Idriss A Kamara, has on Monday told Justice Biobele Georgewill of Commission of Inquiry Room 1, that  granting of unsecured loan is enshrined in Section 35 (a) of the banking Act of 2011.

Kamara admitted issuing out unsecured loans to Politically Exposed Prisons(PEPs) on the basis that they held elected positions of public interest, coupled with their personality, and most importantly the impossibility of default in view of the fact that those in elected offices have end of service benefit or terminal benefit, which can be utilised to liquidate the loans.

He further cited the likely consequence for failure to extend credit at that material time, adding that it was the tradition of the bank not to return cheques issued by some of those personalities in governance.

On the issue of his knowledge about the outstanding amount of unsecured loans , the witness stated that he could not provide a comprehensive update because he could not determine whether recoveries were made since he left the bank.

On the mechanism to ensure the payment of unsecured loans, he elaborated that the bank has a debt collection unit charged with the responsibility to collect debt, and that in some instances; cases were referred to solicitors for redress.

When asked as to what extent the policy of granting unsecured loan to PEPs was well formulated, Kamara stated that it was not well formulated and that they were placed in difficult circumstances, especially having to do with a bank like SLCB that has national character and practically the default bank for PEPs, who are also influential in the appointment of the Managing Directors.

He added that some of those PEPs were also the proxy shareholders of the bank.

Also, Chrispin B. Deigh, who was a former MD of the bank from 2008 to 2013, admitted issuing out unsecured loans to PEPs on four different occasions, but failed to tell the Commission on which basis those loans were granted.

Meanwhile, Justice Biobele Georgewill  remarked that they would end up making recommendations that would help strengthen the SLCB’s policy for the people of Sierra Leone.

He also promised that they would recommend for a security of tenure for MDs of the bank, so that without reference to who influence their appointment, they will be able to adhere to the rules of the bank.