The Central Bank of Nigeria has declared that to be enrolled in the Credit Risk Management System, Other Financial Institutions (OFIs) must meet certain conditions stipulated by the central bank (CRMS).
This was revealed in a circular released on the CBN’s website on Tuesday headed “Re: Enrolment of Other Financial Institutions (OFIs) on the Credit Risk Management System (CRMS)”; by Mr Chibuzo Efobi, Director, Financial Policy and Regulation Department.
The apex bank advised all OFIs to ensure that their customers’ accounts used the 10-digit Nigeria Uniform Bank Account Number (NUBAN) format.
CBN said, “All OFls are hereby informed that; the provisions of the Regulatory Guidelines for the Redesigned Credit Risk Management System for Commercial, Merchant, and Non-Interest Banks in Nigeria issued on February 27, 2017 (Ref No. FPR/DIR/GEN/CRM/06/012). And the Additional Regulatory Guidelines for the operation of the Redesigned CRMS issued on September 10, 2018 (Ref No. FPR/DIR/GEN/CIR/07/007) have become applicable to all OFls”.
The CBN also that “enforcement of Section 3.1(a) of the extant guidelines on CRMS that captures the ‘submit before disbursement’ requirement shall commence on August 1, 2022″.
The apex bank also instructed them to assign a Bank Verification Number (BVN) or a Taxpayer Identification Number (TIN) to their customers’ accounts for individual and non-individual accounts, respectively.
According to the apex bank, the account holder must be profiled on the NIBSS Industry Customer Accounts Database (1CAD) by June 20th.
On Tuesday, May 24, 2022, Nigeria’s Central Bank abruptly raised its benchmark interest rate to 13% from 11.5 per cent for the first time in nearly six years (a 150bps hike).
The Central Bank of Nigeria agreed to keep interest rates on its development finance assets or intervention funds at 5% per year until March 2023.
The loan borrowers’ 5per centt annual interest rate is tantamount to a subsidy, as the loans originally had a 9per cent annual interest rate. Even at 9%, the rate is a steal when compared to commercial bank rates of up to 20% a year.
The central bank’s decision to hold intervention fund interest rates at 5% reflects the central bank’s goal of encouraging economic growth in important sectors that it funds while allowing rate hikes in others.