Regulatory Alerts2014-10-17 | BSD/DIR/GEN/LAB/07/034Guidelines for Processing Requests from DMBs to Extend New/Additional Credit Facilities to Loan Defaulters and AMCON Obligors
The Central Bank of Nigeria (CBN) has issued guidelines for Deposit Money Banks (DMBs) to consider requests from borrowers with delinquent debts. DMBs must first approach Asset Management Corporation of Nigeria (AMCON), if the obligor falls under AMCON's purview, to obtain their no-objection letter, followed by providing necessary details and valuations before requesting an exception from CBN. For non-AMCON obligors, DMBs need to provide the purpose and details of proposed additional facilities, along with board approval, evidence of collateral/credit risk mitigants, and a sign-off from the bank's Chief Risk Officer. Additionally, lending institutions must meet minimum prudential requirements such as capital adequacy ratio, liquidity ratio, and maintain provisions on such loans. The CBN will review requests before deciding whether to approve or decline them, noting that the decision does not obligate DMBs to provide facilities to borrowers.