CBN To Name Loan Defaulters

CBN To Name Loan Defaulters

The Central Bank of Nigeria (CBN), along with banks in the country, have agreed to name and shame debtors in the financial industry as well as further reduce annual spending limits of naira debit card holders outside the country.

Rising from the 321st Bankers Committee meeting which comprises of CBN officials and chief executives of banks, the committee expressed concerns over the rising non-performing loans in the industry which currently stands at 3.3 per cent.

Addressing journalists after the meeting yesterday, the director, banking supervision of the CBN, Tokunbo Martins, said, “The bad and chronic will be denied access to foreign exchange and would have their names published to ensure safety and soundness of the industry.

“It will not only be the bad debtors but their companies, directors, subsidiaries and members would be denied access to foreign exchange.”

Noting that the Nigerian banking industry remains safe and sound, Martins said, “The rising concern is that it is increasingly becoming difficult to get people to pay up on loans.”

On her part, the managing director and chief executive of Stanbic IBTC, Bola Adesola, who noted that total loans in the Nigerian banking industry is close to N15 trillion, explained that the committee resorted to the sanction for loan defaulters to avoid a repeat of the 2008 crisis.

“The limit set for non-performing loans (NPL) is five per cent and currently, the NPL in the industry is around 3.3 per cent. Although we have not reached the limit, we don’t want to get to that limit before we take action and that is why we are taking this step,” she explained.

Also, as part of measures to reduce the pressure on the naira, the committee said it would be revising downwards the annual spending limit on naira debit cards. The managing director of Union Bank, Emeka Emuwa, explained that the decision to cut the limits arose after it discovered “that in a number of cases people were using the cards in a manner that they are not expected to use them; there is some arbitration going on.”

Although the committee did not specify to what extent the limit would be cut, Emuwa said the cut was to enable customers to continue to have access to their funds.

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