The Central Bank of Nigeria (CBN) has introduced new guidelines to enhance credit reporting standards among commercial banks. The move is aimed at promoting transparency, consistency, and responsible loan management within the Nigerian banking sector. In a circular titled “Additional Guide to the Provision of Information on Credit Printouts”, dated June 13 and signed by the Director of Banking Supervision, Olubukola A. Akinwunmi, the apex bank outlined specific rules banks must now adhere to in credit documentation and reporting.
The CBN’s directive follows findings from recent on-site examinations where inconsistencies were discovered between submitted credit printouts and actual customer records. The bank observed that key loan details were altered between different regulatory reviews, undermining data integrity. To address these lapses, the CBN reaffirmed the importance of the existing Prudential Guidelines from 2010 and has now added specific provisions to ensure uniform reporting practices.
Key requirements include the maintenance of consistent contract numbers throughout a loan’s lifespan. If a contract number disappears from reports, banks must show evidence of full repayment; otherwise, the loan will be classified as a loss. Additionally, the original disbursement date of a loan must remain unchanged, even after restructuring or enhancements. Banks must also provide written records of restructuring requests and updated terms to ensure transparency.
A significant limitation has been placed on the use of “yearly” and “bullet” repayment structures, which can now only make up a maximum of 10% of a bank’s total loan portfolio. Project-based loans are specifically barred from using bullet repayments. For loans with terms longer than 12 months, bullet repayment structures are only permitted if backed by cash or a sinking fund that matures before the loan’s due date. The CBN also stated that loans originally not issued with bullet repayment terms cannot be converted to such structures later.
The central bank emphasized that these regulations are intended to foster accountability, reduce loan data manipulation, and strengthen credit risk oversight. The reforms mark another step in tightening regulatory standards across Nigeria’s financial system, as the CBN continues its push for greater stability and trust in the banking sector.
Source: Business day