By Omodele Adigun
As part of its efforts to promote a safe and sound financial system in the country, the Central Bank of Nigeria (CBN) has ordered all Development Financial Institutions (DEIs), Microfinance Banks (MfBs), Primary Mortgage Banks (PMBs) and Finance Companies(FCs) to enrol on its Credit Risk Management System (CRMS).
This is contained in a circular to Other Financial Institutions (OFIs) by its Director of Financial Policy and Regulation Department, Dr Kevin Amugo, obtained from the apex bank’s website on Monday.
According to Amugo, the OFIs are to provide information on all credit facilities, including principal and interest, on the CRMS. He explains that CBN decides to include other financial institutions on the system after recording success with deposit money banks.
The memo states: “As part of the efforts to promote a safe and sound financial system in Nigeria, the CBN introduced the CRMS to improve credit risk management in commercial, merchant and non-interest banks as well as to prevent predatory borrowers from undermining the banking system. With the successful implementation of the CRMS in deposit money banks, it has become expedient to commence the enrollment of other financial institutions (OFIS) on the CRMS platform.”
“Accordingly, all DFIs, MFBs, PMBs and FCs are required to report ALL credit facilities (principal and interest) to the CRMS and to update same on monthly basis. OFIs shall note that Bank Verification Numbers (BVN) and Tax Identification Numbers (TIN) are the only basis for regulatory renditions.
To ensure full compliance, OFIs are reminded to conclude the tagging of ALL live credit files for ALL individual aid non-individual borrowers with BVN and TIN respectively by May 14, 2021.”
CBN urged the financial institutions to acquaint themselves with regulatory provisions on CRMS.
It said appropriate sanctions will be applied to violators of the directive.
“Furthermore, the concerned OFIs are advised to acquaint themselves with the regulatory guidelines for the operations of the redesigned CRMS for commercial, merchant and non-interest banks in Nigeria (February 2017) and the additional regulatory guidelines of September 2017,” it reads.
“Kindly note that the CBN will monitor compliance with the requirements of this circular and non-compliance will attract appropriate sanctions.”