Effective July 4,2016, all banks and Other financial Institutions (OFIs) operating in the country are required to register their security interest in movable assets with the National Collateral Registry (NCR) according to the Central Bank of Nigeria (CBN).
The CBN had in February 2015 issued and gazetted the registration of security interest in movable property by all banks and other financial institutions, in line with its statutory mandate of promoting a sound financial system in Nigeria.
The apex bank yesterday in a circular signed by Kevin Amugo, director, financial policy and regulations department informed all banks and other financial institutions that the notice-based/online NCR is now operational and can be accessed at the registry’s website.
The regulation aims to provide a regulatory framework for accessing credit secured with movable property, creating and perfecting security interest, and realizing security interests in movables. It also aims to provide for the establishment and operation of the collateral registry as well as stimulate responsible lending to Micro small and Medium Enterprises (MSMEs) by providing an efficient mechanism for the registration of security interests in movables assets and realization of such interst in the event of a default.
According to the circular, financial institutions are advised to conduct search on the NCR as part of credit assessment and risk management processes in order to ascertain the encumbrance status of movable assets sought to be used as collateral for credit facilities.
“Each institution (bank or other financial institution) is hereby required to nominate a staff not below the status of a senior manager to serve as the institutions administrator on the registry’s platform,” the CBN’s circular stated.
HOPE MOSES-ASHIKE
