CBN Sets Limits For Banks On NPL

The Central Bank of Nigeria has set new limits for banks and other financial institutions on non-performing loans to reflect in their books The bank disclosed this in its exposure draft on prudential guidelines to microfinance banks, Deposit Money Banks, Mortgage refinance companies, finance companies, and Development Finance Companies.

For the Mortgage Refinance Corporation, it stated, “The maximum ratio of non-performing loans to total gross loans for MRCs shall not at any point in time exceed 10 per cent or such other level as may be prescribed by the CBN from time to time.”

It stated that the MFBs must make provisions for credits such as general provision of two per cent of the outstanding balance of performing facilities or as may be advised by the CBN from time to time.