To strengthen credit control and forestall the recurrence of non-performing loans in banks, the Central Bank of Nigeria (CBN) has said that very soon those without the national identity card may not be able to access bank loans.
It added that in a few weeks time it will release a new minimum disclosure requirement for banks and tenure limit for managing directors and chief executive officers. Sanusi Lamido Sanusi, CBN governor made the declaration at the launch and public forum of CRC Credit Bureau Limited. Experts have hailed the move, saying it has always been easy for people to forge any other identity card, noting that it will be difficult to forge the national identity card.
Sanusi said “the CBN will liaison with the National Identity Management Commission (NIMC) with a view to enhancing the National Identity Card project”, and that “whenever the National Identity scheme takes off we will ensure that no new credit is extended to anybody unless the person has a national identity card”.
Sanusi at the forum warned existing managing directors of banks to start thinking of an exit and succession plan before the imposition of the tenure limit. In the past, some chief executives have been forced to step aside under circumstances that would not have allowed them to continue because of cases that bordered on credibility.
There are currently managing directors of banks who have since the beginning of those banks been the chief executive, said one observer. Sanusi reiterated that in order to make the banking industry safe and sound, there will hence forth be nobody too big to bring to book if any offence is committed. He also said that in order to strengthen banking regulation, in a few weeks time, the CBN will also reel out a new guideline that will set a minimum financial reporting disclosure requirement to ensure that disclosure meets international standard, and to forestall what happened to the banking industry, last year.
Sanusi promised “the full adoption of the International Financial Reporting Standards (IFRS) by all banks in Nigeria by end-2012, subject to NASB approval. “Comprehensive minimum disclosure guidelines for December 2009 accounts are being finalised and will be issued soon. This includes disclosure and reporting guidelines which reflect some of the best-practice aspects of the third pillar of Basel II”.
Angela Nwabouku, chairman, CRC Credit Bureau, expressed confidence that the bureau will assist in providing products and services that will assist providers in taking informed decisions. The company is owned by a consortium of 12 banks and an international brand in risk management, Dun and Bradstreet with presence in over 180 countries. Currently, the company has signed on 15 of the 24 deposit money banks (DMBs) in the country, thus representing 62.5 percent of the banks.
Tunde Popoola, managing director and chief executive of CRC Credit Bureau said 11 of the 15 banks are already using their products and submitting data to CRC, while others are in various phases of implementation. Also, Popoola said that his company has commenced signing on micro finance banks (MFBs) and primary mortgage institutions (PMIs) as at December 2009, and has currently signed up 10 MFBs and five PMIs.
“In 2010, we hope to have all the banks in our database and about 80 percent of PMIs and MFBs. We also hope to add the telecommunications and leasing companies to our membership”, said Popoola.