Regulatory Alerts2009-07-24 | BSD/DIR/GEN/CIR/03/018Suspension of BAs and CPs as Off Balance-Sheet Items
The Central Bank of Nigeria (CBN) has suspended the use of Bankers Acceptances (BAs) and Commercial Papers (CPs) as off-balance-sheet items due to their misuse by banks and discount houses. This includes repackaging troubled assets, non-existent underlying transactions, frequent rollovers beyond allowable tenor, and using them to hide dependence on the interbank market for funding needs. All maturing CPs and BAs must be fully liquidated or treated as on-balance-sheet items. If a bank is likely to exceed its single obligor limit, they should seek CBN's approval for exemption in accordance with BOFIA Section 20(1)A as amended, subject to the loans being performing and a plan for regularization by March 31, 2010.
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