NewsExpress advert FCMB banner
CBN bans loan defaulters from further access to credit facilities

By News Express on 02/07/2014

Share on facebook Yahoo mail icon Gmail icon Share on Google+

Views: 2,718

Nigeria’s apex bank has banned loan defaulters from further access to credit facilities in the Nigerian banking system.

This was announced in a letter to all deposit money banks, development finance institutions and the Asset Management Corporation of Nigeria (AMCON).

Dated June 30, 2014, the letter was signed by CBN’s Director of Banking Supervision, Mrs. ’Tokunbo Martins. It reads as follows:


“The Central Bank of Nigeria (CBN) has noted with concern the impunity with which some borrowers default on their loans in some Institutions and yet are availed further credit facilities by other Institutions under the same or sometimes, different identity.

“This could have the effect of triggering serial defaults and a buildup of non-performing loans which could negatively impact liquidity in the financial sector and ultimately hamper its stability.

“In order to proactively avert the menace of resurgence of non-performing loans, and in furtherance of the CBN’s mandate of maintaining a safe and sound financial system, the Bank hereby directs as follows:

“No Institution shall, without the prior written approval of the CBN, grant a facility to a potential borrower who is in default of any existing facility to the tune of N500 million and above in the case of deposit money banks; and N250 million and above  in the case of development banks and banks in liquidation.

“No Institution shall, except with the prior written approval of the CBN, grant a facility to any potential borrower who has a delinquent facility of any amount whatsoever which has been taken over by the Asset Management Company of Nigeria (AMCON).

“All Institutions shall ensure that all returns on credit facilities granted, together with their performance status are rendered on the Credit Risk Management System (CRMS) and reported to two Credit Bureaux in line with our circulars dated September 10, 2013 and October 21, 2013 respectively.

“All Institutions are also reminded that it is mandatory to perform credit checks on a potential borrower on CRMS and from at least two Credit Bureaux in line with our circular dated April 30, 2010, as part of the credit appraisal process.

“The prohibition threshold may be reviewed by the CBN from time to time with the aim of inculcating responsible and appropriate credit culture in borrowers.

“The provision of this circular shall, in the case of defaulting corporate obligors, also apply to their directors and/or related interests.

“Any Institution that contravenes the above directive shall be required to make an immediate 150% provision of the facility in addition to other existing regulatory sanctions that the CBN may apply.

“Where an Institution fails to report a facility and/or its status on the CRMS or to at least two Credit Bureaux as required, it shall be considered as concealment and misrepresentation of a material fact and the Institution shall be penalized in accordance with the relevant provisions of the Banks and Other Financial Institutions Act, LFN 2004 CAP B3 (BOFIA). In addition, the Chief Executive Officer, Chief Financial Officer, Chief Compliance Officer (or their equivalents) shall be liable to sanctions in line with the relevant provisions of the BOFIA.

“This circular is effective from the 1st of July, 2014.”

Photo shows CBN Governor Godwin Emefiele.

Source News Express

Posted 02/07/2014 11:22:42 PM


Share on facebook Yahoo mail icon Gmail icon Share on Google+



REVEALED: 3 natural ways to get stronger erections, last 25minutes on bed, and increase manhood size without using drugs. Also, Natural Prostrate Enlargement Remedy.. Get In HERE...


You may also like...
Why is Health not Page 1 News in...

Teachers, pupils celebrate as UNESCO World Book Capital...

Edo legislative crisis: APC (majority) lawmakers cry out...

UN bids farewell to Osotimehin

1,664 Kaduna pilgrims airlifted to Saudi Arabia

Rivers APC accuses Wike of squandering N60B in...

Lawmakers query basis for MTN fine review

Turkish coup attempt crumbles; plotters to ‘pay a...

Fidelity Bank partners SystemSpecs for federal collections via...

FG will not force people to surrender land...

Ekiti State Governorship Election result ANOTHER BITTER LESSON...

FG hands over Presidential Lodge to Lagos


Latest News How 5 Dapchi girls died in Boko Haram custody and what killed them – Freed Dapchi girl DSS arrests Ex-Commissioner, Retired Captain over planned “Boko Haram” attack in Kano UNIZIK to absorb best graduating students - VC Zuckerberg admits Facebook errors, apologises Fashola, Amaechi, Adeosun, 20 other ministers holding down passage of 2018 budget — Senate National Assembly to pass 2018 Budget on April 24 Rampaging cultists burn police division in Bayelsa Herdsmen-farmers clashes threat to food security — Okowa Police kill 6 suspected kidnappers, rescue 2 medical doctors More options for Nigerians as Matrix set to launch pre-owned devices National Unity: Niger Governor, Methodist Prelate canvass religious tolerance 3 faculties get full accreditation in DELSU


Most Read Nigerian female sex addict opens up, says ‘I like it with both men and women’ (332,707 views) NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (325,462 views) Shameless Genevieve Nnaji exposes breasts in public (261,109 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (214,600 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (198,177 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (192,674 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (167,890 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (150,591 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (143,305 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (133,460 views) Lagos plane crash: Journalist releases victims’ names (132,791 views) Gunmen kill ASP, 2 other police officers in vain bid to kidnap Rivers PDP chieftain (126,040 views)


Categories Advertorials (3) African Press Organisation (81) Art & Literature (34) Business & Economy (2,974) Business Verdict (36) Columnists (815) Complaints & Requests (94) Enterprise & Opportunities (207) Entertainment (455) Features (554) Global Business Monitor (241) International (1,860) Interview (146) Live Commentary (28) Love Matters (114) News (33,806) Opinion (897) Pidgin (10) Politics (4,632) Religion (703) Sports (1,457) Stock Watch (28) AMA & Al Jazeera Global Update



NLNG Science and Literature Prize Awards




Football Highlight -- BARCELONA - CHELSEA 3:0


APO Group Partner




REVEALED: 3 natural ways to get stronger erections, last 25minutes on bed, and increase manhood size without using drugs. Also, Natural Prostrate Enlargement Remedy.. Get In HERE...

GOCOP Accredited Member

GOCOP Accredited member



Africa Media Agency and Al Jazeera