Sterling Bank Plc may be the first commercial bank in Nigeria to implement the recent directive by the Central Bank of Nigeria for banks to name and shame their debtors with non-performing loans. Sterling Bank has warned its customers it would commence publishing names of bad debtors from August 1. The CBN recently said that non-performing loans in the banking system was N390bn in May 2015.
Sterling Bank in a statement admitted that some of its delinquent debtors had approached it after receiving formal notice for amicable settlement to avoid embarrassment. “Some delinquent debtors are making frantic efforts to repay their loans and avoid their names being published, while others are hopeful that the CBN will extend the deadline and are asking for more time to pay.
“Our position on this remains that those who negotiate agreeable terms of repayment before the expiration of the deadline will not have their names published; while the names of other delinquent debtors will be published in compliance with the CBN’s directive,” the bank said.
In a circular to banks and discount houses, the Director, Banking Supervision, CBN, Mrs. Tokunbo Martins, had noted that the rising trend of NPLs and insisted that the industry’s NPL ratio must not exceed the prudential limit of five per cent in order to improve the banking industry’s asset quality. The CBN stated that at present, the loan portfolio of the deposit money banks currently stands at N15tn, while NPLs constituted about 3.3 per cent of the figure.
The CBN had mandated banks to give delinquent borrowers three months beginning from May 1, 2015 to start making repayment. The central bank also said that borrowers whose loans remain non-performing after August 1 would be banned from the Nigeria’s foreign exchange market and government bond markets.
By Dike Onwuamaeze