CBN Suspends New loans Application, Charges Banks for Recovery
The Central Bank of Nigeria, CBN, has suspended application for new loans under it’s development finance intervention funds.
The apex bank announced this decision in a circular to the Chief Executives of banks, signed by Ag. Director, Development Finance Department, Sa’ad Hamidu.
Among other things, the CBN said it has commenced pull back from direct development financing interventions, adding that the banks are now responsible for recovery of loans granted so far under the development finance intervention funds.
The CBN Governor, Olayemi Cardoso, had said the apex bank’s total disbursements under its development finance intervention reached N10 trillion but he did not give details of the unrecovered amount as at date.
Some industry observers had put the amount of unrecovered development finance loans under the Anchor Borrower Program alone at over N580 billion.
Following the yesterday’s circular, the commercial banks through which the loans were disbursed will now carry the burden of the loan recovery.
Titled, “Suspension of Acceptance of New Applications under the Existing Central Bank of Nigeria, CBN Development Finance Intervention Programme”, the circular stated: “In furtherance of the Central Bank of Nigeria’s (CBN) new policy thrust focusing on its core mandate of ensuring price and monetary stability, the Bank has commenced its pull back from direct development financing interventions.
“Accordingly, the CBN would be moving into more limited policy advisory roles that support economic growth.
“In consideration of the above, the CBN wishes to inform you that it has stopped accepting new loan applications for processing under any of its existing intervention programmes and schemes.
“It is important that you communicate this to your customers and kindly note that the interest rates, as well as other terms and conditions on all existing facilities remain as contained therein their respective approval letters.
“You may also wish to note that your bank shall be responsible for the recovery of the outstanding balance on all facilities previously accessed through your bank.”
