CBN director of banking supervision, Tokunbo Martins, who stated this in a circular, noted the rising trend of non-performing loans. The circular stated that the new rule, effective from May 1, is to “ensure that the industry NPL ratio does not exceed the prudential limit of 5 percent, and to improve the credit culture in the banking industry.
Delinquent borrowers will get three months to start repayments, Martins said in the statement. Borrowers whose loans remain non-performing after that period will be banned from Nigeria’s foreign-exchange and government bond markets, she said.
Nigeria’s banking industry is under pressure with the country’s economy, reliant on oil for 90 percent of export earnings and two-thirds of government revenue, suffering from Brent crude’s 40 percent plunge since June.
Credit losses, which, unlike NPLs, involve writedowns, will increase to as much as 3 percent from 1.8 percent in the next two years, Matthew Pirnie, a director at Standard & Poor’s, said in an interview last week in Lagos.
No comments:
Post a Comment