Despite recommendations to one of the government owned banks, Rokel Commercial Bank (RCB) by Audit Service Sierra Leone (ASSL) on the issuing of bad loans, the practice still continues in the financial institution.
Like previous Audit Reports, the recent Auditor General’s report has revealed that billions of bad loans were given out by the Rokel Commercial Bank (RCB) to institutions with little or no consideration of their financial standing.
The Audit Report revealed that the RCB gave out the sum of Le3,000,000,000 to Pee Cee & Sons as loan of which the sum of Le2,927,123,086 remains to be paid by the institution as of 31st December 2019.
Even though the lending policy of the bank requires RCB to ensure that all non-personal borrowing customers submit audited accounts for facilities in excess of Le200 million, that was not done by the RCB.
The RCB maintained that they extended Pee Cee & Sons’ facility for 3 months on 23rd October 2019 in order to give them ample time to submit their necessary documentation, noting that the facility was last reviewed and limit approved in 2018.
They added that they have obtained the audited financial statements for the year ended 31st December 2019, and that they are in the process of reviewing the facility with the aim of reviewing same.
Like always, the audit warns that management should ensure that due process and all relevant requirements are met by customers before giving out loans to them in order to avoid giving out bad loans.