CBN Opens Black Book for Bad Debtors

Central Bank of Nigeria (CBN) has opened a black book for serial defaulters in a new zero tolerance regime against bad debtors in the nation’s financial system.

The apex bank is to also publish names of such blacklisted borrowers, with a view to preventing them from accessing loans from any Nigerian bank again.

Under the plan, even borrowers of less than N5 million who have defaulted in repayment would be barred from further enjoying fresh credit.

Also, banks would not be disposed to financing new investments in the power sector, but rather, concentrate on the existing businesses to ensure that the investors attain their full capacity installations.

These were some of the new rules rolled out by the new Governor of CBN, Godwin Emefiele, at his inaugural  meeting  with chief executives of money deposit banks, under the aegis of Bankers’ Committee, yesterday in Abuja.

Consequent upon this plan, a black book containing names of banks’ bad debtors in the country would be opened immediately to blacklist defaulters from further obtaining bank loans in the country. The initiative will be  assisted with the ongoing banks’ biometric capturing exercise, which pilot exercise ended at the weekend,  where over 10000 bank customers were registered.

The new rules were disclosed yesterday by Mrs. Tokunbo Martins, director of Banking Supervision of the CBN , at a briefing after the Bankers’ Committee  meeting.

She was accompanied by Phillips Odouza, GMD, UBA; Segun Agbaje, GTB;  and Ladi Balogun, FCMB,

Martins  said that  “Blacklisting of debtors is something that we have to do gradually. You remember that in 2012, we issued a circular, blacklisting borrowers of N5 million and above from banks and those loans went bad and ended up in AMCON and they were blacklisted.

“What we are doing right now is that we are moving that threshold down, we are working out the modality. It is something that will be concluded very soon and then the industry will know. In fact, the entire country will know those that are no longer entitled to borrow from banks, because they have defaulted in some loans in the past,” she said.

With the publications of their names, the apex bank Director of Banking Supervision said the CBN would make sure that any of the serial and fraudulent borrowers was prevented from borrowing again from any Nigerian bank.

On macro economic stability, which was one of the issues discussed at the meeting, the bank chiefs observed that the new CBN governor was committed to price and exchange rate stability.

The committee, observing that though the interest rate was most desirable at present, however, said the new CBN, under Mr Godwin Emefiele, was working towards bringing interest rate down, a task it observed would be gradual.

In the area of development banking, the bankers’ committee said the new CBN would focus attention on agriculture, small and medium scale enterprises and power.

Rather than supporting the establishment of new power plant, the committee said it would focus on the existing power plants and ensure they performed to installed capacity.

The bankers’ committee also announced that over 10,000 bank customers had been enrolled in the first phase of biometric exercise, which came to an end last week.

The committee also disclosed that many bank customers were no longer coming to transact businesses in the banking halls, with their migration to e-platform.

However, the committee stated that the number of banking public, still under 30 million, was low, compared to the number of telephone subscribers, whom they described as potential bank customers.

“We have a means of identification of customers. So far, about 10,000 customers have been enrolled and we have continued to make progress.

“The pilot phase was actually concluded last Friday and the roll out for customers started yesterday (Monday). We believe that it’s going to assist the economy.

“It is going to assist us in consumer lending, to provide credit availability to people that have not been included in the banking system,” the committee stated.