CBN Orders Banks To Publish Names Of Debtors From End Of July

Following an earlier warning to chronic bank debtors in the
country to pay up their debts, the Central Bank of Nigeria (CBN) on
Friday directed deposit money banks (DMBs) to publish the list of
delinquent borrowers whose debts have remained non-performing
in at least three national daily newspapers from the end of July
this year.
The banking sector regulator explained that the move is to halt the
rising trend of non-performing loans (NPLs) in the industry and
also ensure that the industry NPL ratio does not exceed the
prudential limit of five per cent. Presently, the industry NPL ratio
stands at 3.3 per cent.
The Apex bank gave the directive in a letter dated April 22, 2015
and addressed to all banks and discount houses. The letter titled:
“Recovery of Delinquent Credit Facilities,” was signed by the
Director, Banking Supervision, CBN, Mrs. Tokunbo Martins.
According to the CBN, banks and discount houses are required
with effect from May 1st 2015, to give the delinquent debtors three
months of grace to turn their accounts from non-performing to
performing status, after which their names would be published.
The delinquent debtors, for both individual and corporate
accounts, are those whose accounts have been cla$$ified lost and
the names include the persons, entities, directors, subsidiaries and
other related parties.
According to the Apex bank, those affected would be banned from
participating in the Nigerian foreign exchange market and also
from participating in the Nigerian government securities market.
Martins had earlier this month said the decision to publish the list
of bank debtors was to prevent another banking crisis.
The central bank director had explained: “The CBN has managed
to keep the banking industry safe and sound in collaboration with
all members of the Bankers’ Committee. “But some data shows
that it is increasingly becoming difficult for some debtors to pay
up their loans. So it was decided that going forward, one thing that
we may do is to stop them from getting access to foreign
exchange. This is to ensure the continuous safety and soundness
of the banking industry
“It is not all debtors, it is the bad and chronic debtors, those ones
that have deliberately refused to pay; those are the ones we are
talking about. Total loans in the industry are in the region of N13
trillion,” she added.