The Central Bank of Nigeria (CBN) has stated that all provisions for regulatory guidelines concerning the redesigned Credit Risk Management System (CRMS) for commercial, merchant and non-interest banks issued on February 27, 2017, are applicable to all Other Financial Intuitions (OFIs) in the country.
As a result, the apex bank said enforcement of Section 3.1 (a) of the extant guidelines on CRMS that captures the “submit before disbursement” requirement shall apply to all OFIs on August 1, 2022.
The central bank gave the directive in a circular address to all OFIs, dated May 24, 2022, which was signed by its Director, Financial Policy and Regulation Department, Chibuzo Efobi.
The circular further directed the OFIs to ensure that all their customer accounts comply with the 10-digit Nigeria Uniform Bank Account Number (NUBAN) format and are tagged with Bank Verification Number (BVN) or Tax Identification Number (TIN) for individual and non-individual accounts respectively of the account holder.
The OFIs are further requested to profile the information on the NIBBS’ Industry Customer Accounts Database (ICAD) not later than June 20, 2022.
The CBN stressed that the provision of these data remained the prerequisite for the enrollment onto the CRMS going forward adding that the circular was further to various engagements with the OFIs concerning deploying the credit risk requirement.
The bank warned that failure by the OFIs to comply with the stipulated timelines would attract appropriate sanctions.
The CBN had in April 2021 given Microfinance Banks (MFBs), Development Finance Institutions (DFIs), Primary Mortgage Banks (PMBs) and Finance Companies (FCs) up to May 14, 2021, to ensure full compliance with its CRMS.
To ensure full compliance, the banking sector regulator had also advised the OFI operators to conclude the tagging of all live credit files of individuals and non-individual borrowers with BVN and TIN respectively by May 14, 2021.
The central bank pointed out that the move was part of efforts to promote a safe and sound financial system in Nigeria through the introduction of the CRMS to improve risk management in all financial institutions to prevent predatory borrowers from undermining the banking system.
It added that with the successful implementation of the CRMS in deposit money banks, it has now become expedient to commence the enrolment of OFIs on the CRMS platform.