concerns about the growing amount of Non-Performing
Loans in the books of Deposit Money Banks and said it
would publish the names of chronic debtors.
The Director, Banking Supervision, CBN, Mrs. Tokunbo
Martins, who stated this at a press briefing after the 321st
meeting of the Bankers' Committee in Lagos, said the central
bank, in collaboration with the committee, had also decided
to stop the serial debtors from buying foreign currencies at
the official interbank foreign exchange market.
Also to be stopped from buying foreign currencies,
according to her, are members of the board of
directors of debtor companies as well as their subsidiary
firms.
According to PUNCH, Mrs. Tokunbo Martins recalled that the
Asset Management Corporation of Nigeria had spent
a fortune to buy toxic assets from the banks' books in the
past and that it was important to stage timely interventions
to forestall a repeat of past mistakes.
Martins said:
, "So, it was decided that going forward, one thing that we
will do is to stop them (chronic debtors) from getting
access to foreign exchange. Another thing that we also
considered doing is to publish the names of the
borrowers that refuse to pay up. This is to ensure the
continuous safety and soundness of the banking
industry.
It is not all debtors, it is the bad and chronic debtors;
those ones that have deliberately refused to pay; those
are the ones we are talking about. Now, in the industry
we have a standard, we don't want the NPLs to be more
than five per cent of the total loan in the industry.
The total loan in the industry is in the region of N13tn to
N15tn. Right now, we have not reached the upper limit of
five per cent, but we don't want to get there. That is why
we decided that we need to come out with this measure.
Currently, the industry average of non-performing loans
is at 3.3 per cent and we don't want to get to five per cent;
that is why we came up with this measure."
She said the CBN, in collaboration with the Bankers'
Committee, had laboured to keep the banking industry safe
and sound, and that there was a need to ensure the
continued safety of the banks.
…to slash debit cardholders' spending overseas:
The Managing Director and Chief Executive Officer, Union
Bank Plc, Mr. Emeka Emuwa, said the amount spent by naira
debit cardholders overseas was rising fast and the banks
were beginning to notice some arbitrate in the segment.
Consequently, the CBN and the Bankers' Committee will
slash the annual allowable drawdown for each bank
customer, according to him.
The current annual allowable drawdown is $150,000 per
customer but Emuwa did not specify the amount it would be
slashed to.
He said:
"We did find that in a number of cases, people were
using the cards in manners that were not expected of
them and there have been some arbitraging going on. So,
in order to sustain stability, what was agreed by the
committee was that the limits for the use of the naira
debit cards would be reduced.
As a customer, if you have a dollar account, you will still
have unfettered access to it; but for naira debit accounts,
the limits will be reduced to more judicious levels. This
specifically refers to the use of these banks' products
abroad, because when they are used abroad, the
merchants have to be settled.
Even if it is the Automated Teller Machines, the service
provider, Visa or MasterCard has to be settled in foreign
currencies and we find that it is a drain on the foreign
resources available to finance our industries. So, there is
going to be a reduction in the annual allowable
drawdown using naira debit cards abroad."
The Managing Director, Standard Chartered Bank Nigeria,
Mrs. Bola Adesola, said the foreign exchange market was
safe and sound, and was already moving towards a near
convergence of rates in the various segments.
This, she said, was as a result of the positive actions taken in
the past by the central bank and the committee.
"As you are all aware, in the last couple of months,
several methods have been taken by the CBN and the
banks to try and attain some stability in the foreign
exchange market. This has been achieved because the
demand for foreign currencies by businesses has been
continually met. All genuine demands for foreign
currencies have been met by the CBN," Adesola said.
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