- Says the effort is to improve the soundness and safety of Nigeria’s financial system
Nigeria’s central bank has said that it will begin the enrollment of Other Financial Institutions (OFIs) on the credit risk management system (CRMS) platform following the successful implementation of the system in deposit money banks (DMBs). The bank in a circular stated that it is expedient it enrols these institutions on the platform as part of its efforts to promote a safe and sound financial system in the country.
According to the circular signed by Kevin Amugo, the Director of financial policy and regulation department of the apex bank, it revealed that all other financial institutions as the development finance institutions (DFIs), microfinance Banks (MFBs), primary mortgage banks (PMBs) and finance companies (FCs) will be enrolled into the system as a means to improve their credit risk management across the commercial, merchant and non-interest banks.
The circular further stated that the move by the bank will help prevent predatory borrowers from undermining the Nigerian banking system. Consequently, all institutions (DFIs, MFBs, PMBs, and FCs) concerned have been asked to report all credit facilities to the platform and also ensure there is a monthly update of the same information on the platform. The facility comprised of both principal and interest as the apex bank further demand that these OFIs conclude the tagging of all life credit files for borrowers (individual and non-individual borrowers) with bank verification numbers (BVN) and tax identification numbers (TIN) respectively on or before May 14, 20201.
With the TIN and BVN being the only basis for regulatory rendition, the CBN has advised that the institutions acquaint themselves with regulatory guidelines for the operations of the redesigned credit risk management system (CRMS) for commercial, merchant and non-interest banks in Nigeria of February 2017 and the addition regulatory guidelines of September 2017.
Meanwhile, the apex bank said that appropriate sanctions will be meted on non-compliance with the requirements of the issued circular as it will ensure full compliance by the institutions.