As the three months’ grace period ended on Friday, chronic debtors and other bad loan defaulters have only two more weeks to work out the repayment of their debts with their banks before their names will be published in the media.
Similarly, Central Bank of Nigeria (CBN) which gave the directive the directive to publish the list of debtors will also not go back on its words as a source within the apex bank confirmed that the ‘name to shame’ and exclusion from the foreign exchange market would still go on.
The CBN, at the 321st Bankers Committee Meeting, which comprises CBN Governor and chief executives of banks, in April expressed concern about the rising non-performing loans in the industry and gave the grace period for the bad debtors to square up their loans or face the consequences.
It had directed banks to give bad debtors three months to settle their accounts otherwise they would be named in the media and barred from taking part in Nigerian currency and government debt markets.
Mr Tokunbo Martins, Director, Banking Supervision of the CBN, the “bad and chronic” debtors will be denied access to foreign exchange and would have their names published to ensure safety and soundness of the industry.
Martins said: “It will not only be the bad debtors but their companies, directors, subsidiaries and members would be denied access to foreign exchange.”
The Assets Management Company of Nigeria (AMCON), which buys bad debts from banks, also on Monday asked loan defaulters in the country to immediately square their accounts or it would publish their names in line with the CBN directive.
The bad loans buyer warned bad debtors that if loans remained unpaid, it would take steps to recover the debts by legal means. It advised debtors not to assume it would forgive their indebtedness. It also asked bad debtors to present their restructuring plans.
A source at AMCON said that it would begin publishing the names of the bad debtors in two to three weeks’ time. Also, some banks such as Stanbic IBTC and Sterling Bank also stated their resolve to name bad debtors who have not approached the banks to have their loans restructured.
Stanbic said in a statement that in addition to publishing the list of defaulters by the end of August, it would also use legal and other means to recover non-performing loans. While issuing its order, the central bank did not give the value of the level of non-performing loans held by banks.