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CBN releases additional guidelines on redesigned CRMS



CBN releases additional guidelines on redesigned CRMS


In order to provide clarification on compliance and guidance for rendition of credit/loan transactions under special circumstances, the Central Bank of Nigeria (CBN) has issued additional regulatory guidelines for the operation of the redesigned Credit Risk Management System (CRMS).

The redesigned CRMS was released by the Apex Bank in February last year, primarily to identify and minimize activities of serial defaulting and predatory borrowers in the financial services industry and to also help in strengthening the credit appraisal processes of participating institutions.

However, in a circular to commercial, merchant and non-interest banks posted on its website yesterday, the CBN said the additional guidelines are aimed at providing compliance clarification and guidance for rendition of credit/loan transactions for situations such as where a company is legally registered in Nigeria but all or some of the Directors on the firm’s board fall into the Non Nigerian Non Resident Director (NNNRD) category; the Federal, State, or local government guarantee loans to companies registered in the country as well as for all categories of loans to employees (directly and indirectly) of Commercial, Merchant and Non-Interest Banks.

It further stated that the additional guidelines are also aimed at addressing sunset period for closed records on the CRMS.

The CBN, however, emphasised that despite the release of the additional guidelines, the underlying basis for the operation of the redesigned CRMS remain.

Thus it stated that: “Individual borrowers must be uniquely identified by Bank Verification Number (BVN); all non-individual (corporate entities) must be uniquely identified by Taxpayer Identification Number (TIN); all Directors/Promoters of borrowing entities must be uniquely identified and reported for each loan record created on the CRMS; rendition on the CRMS is required before disbursement of any loan or credit facility.”

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