Regulatory Alerts2012-09-19 | BSD/DIR/GEN/AMC/05/048Prohibition of New Credit Facilities to Debtors of the Asset Management Corporation of Nigeria (AMCON)
The Central Bank of Nigeria, through its Banking Supervision Department, has prohibited all Deposit Money Banks from approving or disbursing new credit facilities to debtors whose loans were transferred to the Asset Management Corporation of Nigeria (AMCON) until they fully repay their agreed outstandings. This applies to individuals, organisations, and principal shareholders/directors of companies with outstanding loan amounts purchased by AMCON of N5 billion or more at the time of purchase. The list of affected borrowers provided by AMCON is attached to this circular. Banks found in breach will be required to make an immediate provision of 100% of total principal and interest outstanding in the account of the customer and related parties, along with any additional regulatory penalties decided by the Central Bank of Nigeria.
CENTRAL BANK OF NIGERIA Banking Supervision Department Central Business District P.M.B. 0187 Garki, Abuja.
09-462-36402 Fax 9-462-36418 BSD/DIR/GEN/AMC/05/048 September 17, 2012 Circular to All Banks PROHIBITION OF NEW CREDIT FACILITIES TO DEBTORS OF THE ASSET MANAGEMENT CORPORATION OF NIGERIA (AMCON) As part of the Central Bank of Nigeria's continuing efforts at strengthening financial stability and entrenching a culture of financial discipline, it has become necessary to stop debtors who failed to repay their loans to banks and had those loans subsequently transferred to AMCON, from further enjoying credit facilities from Deposit Money Banks until they fully repay agreed outstandings to AMCON.
In the initial instance, this restriction shall apply to individuals, organisations, companies as well as principal shareholders and directors of companies where the outstanding value of loans purchased by AMCON amounted to N5 billion or above as at the date of purchase, without regard to the actual amount paid by AMCON in exchange for the loan. The list of all affected borrowers as provided by AMCON is attached to this circular.
Deposit Money Banks are prohibited from approving or disbursing any new credit facilities to all persons and organizations in this list with effect from the date of this circular, until full liquidation of agreed indebtedness to AMCON.
For the avoidance of doubt, any DMB that is in breach of these guidelines shall be required to make an immediate provision of 100% of total principal and interest outstanding in the account of the customer and related parties, in addition to whatever regulatory penalties the Central Bank of Nigeria may decide to impose.
A. O. MARTINS (MRS.) DIRECTOR OF BANKING SUPERVISION