CBN bars debtors from access to foreign exchange

To further ensure soundness of the country’s banking industry, the Central Bank of Nigeria (CBN) in conjunction with the Bankers Committee, has moved to restrict chronic debtors from accessing foreign exchange and to publish their names soon.

Tokunbo Martins, director, of banking supervision CBN, who disclosed this after the Bankers Committee meeting held in Lagos, also said the measures are to ensure safety and soundness of the banking industry.

“The CBN has managed to keep the banking industry safe and sound, in collaboration with all members of the Bankers Committee. But one issue of concern is that it is becoming increasingly  difficult to get some debtors to pay up on their loans.

“It was decided that going forward one thing that we may do is to stop them from getting access to forein exchange, another thing that we also considered that we may do going forward, is to publish the names of borrowers that refuse to pay up on their loans”, she said.

Currently, the total loans in the industry sum up to between N13trillion and N15 trillion and the industry’s non-performing loans  amount to about 3.3 percent compared to the five percent benchmark.

“We do not want to get there and that is why we decided that we need to come out with these measures”, she added.

Other members of the Committee who addressed the media after meeting include Ibrahim Mu’azu, director, corporate communications, CBN, Bola Adesola, managing director, Standard Chartered Bank Nigeria limited, Omar Hafeez, managing director, Citibank Nigeria Limited, and Emeka Emuwa, group managing director/chief executive, Union Bank of Nigeria Plc.

The Committee also agreed to reduce the limit of debit card usage abroad. This is following the discovery that people are using naira debit cards in a manner that is not expected. 

Explaining further, Martins said, “this  specifically refers to the use of these cards aboard because when they are used abroad, the merchant has to be settled and even if it is ATM the provider has to settle in FX, so we found that will put a drain on FX resources available to finance the industry.

“There is going to be a reduction in the allowable draw down using naira debit cards abroad”.

Biometric verification was also discussed at the meeting. According to the Committee, it is critical that account holders continue to proactively get their BVN numbers from the banks, as it would become progressively difficult for them to access credit if they do not do that.

The banks will be launching awareness campaigns to enlighten those who do not know that biometrics is a key part of the future of the banking industry in Nigeria, Hafeez said.

The Committee however  noted that there has been stability and calmness in the foreign exchange market, following some measures taken by the CBN in collaboration with the banks in a couple of months.

“We have also seen reversal of the continued depreciation of the naira in the inter-bank and parallel market such that there is a near convergence, as a result of the measures that were taken collaboratively between the CBN and banks”, Adesola said.

HOPE MOSES-ASHIKE