CBN SETS AUG 1 FOR ENFORCEMENT OF CREDIT RISK REGULATIONS

The Central Bank of Nigeria (CBN) has mandated the enrolment of other financial institutions (OFIs) on the credit risk management system (CRMS).

CBN gave the directive in a circular published on its website and signed by Chibuzo Efobi, Director, Financial Policy and Regulation Department.

CRMS is the practice of mitigating losses by understanding the adequacy of a bank’s capital and loan loss reserves at any given period.

With this, the CBN and OFIs would be able to track any bank debtor to know if such a debtor owes another institution.

OFIs include development finance institutions (DFIs), microfinance banks, (MFBs), primary mortgage banks (PMBs), and finance companies (FCs).

“All OFls are hereby informed that the provisions of the regulatory guidelines for the redesigned credit risk management system for commercial, merchant, and non-interest banks in Nigeria issued on February 27, 2017 (Ref No. FPR/DIR/GEN/CRM/06/012) and the additional regulatory guidelines for the operation of the redesigned CRMS issued on September 10, 2018 (Ref No. FPR/DIR/GEN/CIR/07/007) have become applicable to all OFls,” the circular reads.

“Accordingly, and more specifically, enforcement of Section 3.1(a) of the guidelines on CRMS that captures the ‘submit before disbursement’ requirement shall commence on August 1, 2022.”

Section 3.1(a) of the regulatory guidelines for the operation of CRMS states that “rendition on the CRMS is required before the disbursement of any loan or credit facility.

“This process of submission does not interfere with any participating bank’s decision to extend a loan or credit to its customer. Consequently, rendition is only required after approval to disburse is given.”

The apex bank also reminded 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 of the account holder and profiled on the Nigeria Inter-Bank Settlement System’s (NIBSS) industry customer accounts database (CAD) not later than June 20, 2022.

“These remain prerequisites for enrolment onto the CRMS,” CBN said.

CBN further warned that failure to comply with the stipulated timelines would attract appropriate sanctions.

Experts charge insurance professionals on industry’s development

Insurance professionals who gathered at this year’s 2022 edition of Fellows’ Hangout in Lagos organised by the Chartered Insurance Institute of Nigeria (CIIN) have been urged to structure their area of specialisation to promote industry awareness.

The Chairman, Examination Committee, CIIN, Olusola Ladipo-Ajayi, who spoke on a paper titled: ‘Contributions of Fellows to the growth of the Institute’ at the CIIN 2022 Fellows’ night, said there is a need for collaboration between the institute’s relevant stakeholders to promote insurance awareness and place the industry on the path of growth.

Ladipo-Ajayi tasked insurance fellows to hold meetings regularly and make recommendations that would assist the institute saddled with the responsibility of promoting insurance awareness.

He implored them to join hands with the institute to audit course books; help to supervise examinations and assist in determining skills and knowledge programmes.

Chairman, of the Society of Fellows, Prof. Joseph Irukwu, who was represented by the past President, Sunny Adeda, decried the number of fellows of the institution, which is 121, compared to India with 3,767 insurance fellows.

Adeda beseeched insurance practitioners and the public to embrace the institute’s examinations, stressing that the insurance industry currently has less than 4,000 professionals.

The President, CIIN, Dr. Muftau Oyegunle, charged the institute to determine a high standard of knowledge and skills for persons seeking to become registered members of the professional body, adding that he has strong confidence that this would help grow the industry.