May 9, 2021
  • May 9, 2021

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CBN to monitor borrowers in other financial institutions via CRMS to curb bad debts

The Central Bank of Nigeria (CBN) has extended the implementation of its Credit Risk Management System (CRMS) to other financial institutions in the country in a bid to discourage predatory borrowers from undermining the system.

The regulatory bank's Director of Financial Policy and regulation, Kelvin Amugo in a circular to all development banks and other financial institutions said with the successful implementation of the CRMS in banks, it has become expedient to commence the enrollment of other financial institutions on the platform.

In a circular to microfinance, primary mortgage banks, development financial institutions and finance companies, Amugo said all other financial institutions are expected to report all credit facilities both principal and interest the CRMS and also update same on monthly basis.

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"OFIs shall note that Banks Verification Numbers (BVN) and Tax Identification Numbers (TIN) are the only basis for regulatory renditions.

"To ensure full compliance, OFIs are reminded to conclude the tagging of all live credit files for all individual and non-individual borrowers with BVN and TIN respectively by May 14, 2021," the CBN Director stated in the circular.

The CBN said it will monitor compliance with the requirement of the circular while non-compliance will attract appropriate sanctions.

It would be recalled that the CBN in a bid to create a sane lending environment and ensure that the Non-Performing Loans (NPLs) of financial institutions stay within the regulatory threshold, launched the CRMS as register for all borrowers within the banking sector.

The CRMS platform is also designed to discourage predatory borrowers who move from one bank to another to borrow funds without intentions of paying back.

Though credit to the economy grew 1.75 percent to N43.67 trillion in February 2021, Non-Performing Loans (NPLs) ratio at 6.3 percent by February, the CBN considered the ratio higher than the 5.0 percent regulatory threshold.