In order to ascertain the actual well-being of banks
owing to the nation’s macroeconomic challenges and rising non-performing loans
(NPLs), the Central Bank of Nigeria (CBN) is currently carrying out examination
on banks.
At
the end of the exercise, the banking sector regulator said, it would determine
how best the industry should be supported.
The
Director, Banking Supervision, CBN, Mrs. Tokunbo Martins, disclosed this in
response to enquiries .
Banking
sector NPLs have been predicted to jump to 12.5 per cent of the total loans of
the banks this year, up from the central bank’s target level of five per cent
at the end of last year, according to Agusto & Co, Nigeria’s main rating
agency.
This is even worsened by the weakening consumer confidence and slide in the country’s Gross Domestic Product (GDP).
In
view of the current macro-economic challenges in the country, the CBN last week
announced that it had granted a one-off forbearance to banks this year to
write-off their fully provided NPLs without waiting for the mandatory one year.
The
CBN had explained that it acknowledged the request by banks to amend the
requirements of Section.3.21 (a) of the Prudential Guidelines, which mandates
banks to retain in their records, fully provided NPLs for a period of one year
before they are written off.
“The
CBN has no intention of repealing the provision of the above mentioned section
of the guidelines. In view of the current macro-economic challenges, however, the
CBN hereby grants a one-off forbearance this year 2016 to banks, to write-off
fully provided for NPLs without waiting for the mandatory one year,” Martins
stated in the circular addressed to all banks.
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