Banks To Publish Names Of Loan Defaulters

Banks and discount houses will from August 1st commence the publication of the list of loan defaulters in newspapers, as directed by the Central Bank of Nigeria.

The CBN in a circular referenced BSD/DIR/GEN/LAB/08/022 dated April 22, 2015 entitled: Recovery of Delinquent Credit Facilities, asked the banks to give three month deadline to all loans defaulters starting from May 1, 2015 to settle their debts or get their names published in the papers.

In the circular, signed by the CBN Director of Banking Supervision, Mrs Tokunbo Martins said it has observed the rising trend of non-performing loans (NPL) in the 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 (The delinquent debtors are those whose accounts have been classified lost and include the persons, entities, directors, subsidiaries and other related parties). The list must be sent to the CBN as soon as the publication is made.

“In order to ensure that the industry NPL ratio does not exceed the prudential limit of 5%, and to improve the credit culture in the banking industry, banks and discount houses are directed to observe prudent credit underwriting and monitoring standards.”

It was leant that the banks have since commenced sending notices to the loan defaulters via papers publications.
Sources at the banks who don’t want to be named due to the sensitive nature of the issues said already some of the defaulters have been reporting to the banks to negotiate the settlement terms.

“I think there is serious progress so far, I leant that some loan defaulters are responding to the notice,” one of the bank officials told Daily Trust.

About N400 billion non-performing loans out of the N13 trillion total loans in the country are recorded which is equivalent to 3 percent of the total credit.

Yesterday, Asset Management Corporation of Nigeria (AMCON) in its notice urged the debtors and obligors connected to its loans to immediately pay their debts to the, or present a comprehensive, feasible restructuring plan to settle the debts.

The Bad debt manager said if no action is taken, it will, without hesitation, utilise the full extent of its special statutory powers under the AMCON Act to recover the amounts due and outstanding plus accrued interest.