Debtors whose accounts have been classified lost in the books of Deposit Money Banks (DMBs) and Discount Houses in Nigeria will, from May 1, 2015, get letters from their lenders giving them three months of grace to turn their accounts from non-performing to performing status or risk exposure to the public, including other sanctions.
Delinquent debtors in this category include the persons, entities, directors, subsidiaries and other related parties who have borrowed money and refused to pay back.
In a letter to all banks signed by the Director, banking supervision, Central Bank of Nigeria (CBN), the apex bank said it has observed the rising trend of non-performing loans (NPL) in the industry.
CBN said it gave the directive to banks and discount houses to encourage them to observe prudent credit underwriting and monitoring standards in order to ensure that the industry NPL ratio does not exceed the prudential limit of five per cent, and to improve the credit culture in the banking industry.
“Furthermore, banks and discount houses are required, with effect from May 1, 2015, to “give the delinquent debtors three months of grace to turn their accounts from non-performing to performing status; publish the list of delinquent debtors that remain non-performing in at least three national daily Newspapers quarterly and the list sent to the CBN as soon as the publication is made,” the letter read in part.
According to the apex bank, banks and discount houses were also directed to note that delinquent debtors in the category described above would be blacklisted by the CBN and are therefore “banned from participating in the Nigerian foreign exchange market and also from participating in the Nigeria Government securities market.”