The Central Bank of Nigeria (CBN) has announced the suspension of new loan applications for processing under its existing intervention programs and schemes. The decision, detailed in a circular signed by the acting Director of the Development Finance Department, Sa’ad Hamidu, is part of the CBN’s commitment to refocus on its core mandate of ensuring price and monetary stability.
The circular, addressed to chief executives of Nigerian banks, outlined the central bank’s intention to withdraw from direct development financing interventions and transition into a more limited policy advisory role that supports economic growth. As a result, banks are now tasked with the responsibility of recovering the outstanding balances on all facilities previously accessed through their institutions.
Hamidu emphasized the importance of communicating this change to customers, stating, “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.”
The decision to halt new loan applications reflects a shift away from direct involvement in developmental financing towards a focus on policy advisory functions. This move by the CBN aligns with its strategic objective to streamline operations and concentrate on macroeconomic stability.
The statement further read, “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.”
The suspension of new applications underscores CBN’s commitment to a more targeted approach in fulfilling its mandate aimed at playing a key role in providing policy guidance and support for economic growth while leaving the responsibility of financial intermediation and recovery to commercial banks.
Reiterates Banking Sector Resilience
Meanwhile, in a series of recent developments, the Central Bank of Nigeria (CBN) has taken proactive measures to address concerns related to the nation’s currency, warning against counterfeit notes, approving a reviewed service charter, and reaffirming the resilience of the banking sector. These actions are aimed at maintaining stability, ensuring transparency, and fostering confidence in the Nigerian financial system.
Responding to public concerns about the scarcity of Naira notes, the apex bank in a statement through its Corporate Communications Department made clarifications regarding reports of Naira shortages at various points, including bank counters, ATMs, PoS, and Bureaux de Change (BDCs).
The CBN clarified that there is no shortage, explaining that the perceived scarcity is attributed to large-volume withdrawals by Deposit Money Banks (DMBs) and panic withdrawals by bank customers.
“The public is assured that the CBN is actively managing the situation to maintain the stability of the currency supply.’’
Also responding to the question counterfeit Naira Notes in circulation in a separate statement titled on Banknotes in Circulation, the CBN confirmed the presence of fake Naira notes nationwide warning individuals engaged in transactions at food markets and commercial centers to be cautious.
Quoting Section 20(4) of the CBN Act (2007) as amended, the CBN emphasized the legal consequences of counterfeiting Nigerian currency. The CBN has encouraged the public to report suspected counterfeit notes to law enforcement agencies immediately.
Meanwhile, the reviewed CBN Service Charter has been approved Mr. Yemi Cardoso Governor of the Central Bank (CBN). The charter, comes in compliance with the Business Facilitation Act 2022, which outlines the working relationship between the CBN and its external customers.
The document also highlights the bank’s mandates, vision, mission, and core values, providing a comprehensive list of services and corresponding service standards.
The service charter emphasizes the CBN’s commitment to efficient, accountable, and transparent service delivery, promoting the ease of doing business in Nigeria.
The CBN also has reiterated the resilience of the Banking Sector stating that some licensed commercial banks failed the Capital Adequacy Ratio (CAR) for international authorization.
Addressing media reports suggesting, the CBN affirmed the resilience of the Nigerian banking industry, the CBN clarified that key financial soundness indicators were within regulatory thresholds, as reported in its recent Economic Report of 2023. Engaging with critical stakeholders, the CBN aims to sustain confidence in the Nigerian financial sector.
“The document clearly outlines the bank’s mandates, vision, mission, and core values.
“It contains the list of services offered by the bank through its various departments and the service standards for each service.
“The service charter also includes a standardised customer complaints form for reporting service failures as well as a mechanism for addressing failures in any of the bank’s services,’’ it stated.
It added that the service charter reiterated CBN’s commitment to effective and prompt service delivery to its stakeholders and to its customers.
“It enables our customers to know the range of services provided by the bank as well as the standards at which these services would be provided.
“It equally states redress procedures in the event of service failure from any of our service windows.
“The charter applies to all stakeholders and customers of the bank,’’ it stressed.
In the Foreword to the reviewed document, Cardoso reiterated CBN’s commitment to providing more responsive and citizen-friendly governance through quality service delivery that is efficient, accountable and transparent.
Nigerians are urged to disregard media reports listing banks as failing CAR stress tests, as such reports did not emanate from the CBN.
