27 April 2015, Abuja – 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 classified 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.