Business Hilights

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Expert hails CBN over freezing interests on N800b oil marketers’ NPLs

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Henceforth, commercial banks who had been deceiving their balance sheet by way of computing interests on the over N800b oil marketers’ non-performing loans (NPLs), will halt the illicit debt pile up.

This is coming in compliance with a Central Bank of Nigeria (CBN) directive that all income on the facilities be suspended on marketers’ NPLs pending further development.

Recall that oil marketers’ loans went bad following the delay in subsidy payment by the Federal Government who, in the first instance encouraged them to go for throat cutting loan conditions in banks.

Whereas the Managing Director of SunTrust Bank Limited, Ayo Babatunde explained at a programme that “The CBN had placed a 100 per cent suspension of income on the oil marketers’ loans by banks,” an energy analyst, Dr Collins Aduda, in an interview, reasoned that “The CBN may have taken the action to ensure that banks did not report paper profits on NPLs.”

According to him, “It will amount to fraud if after a loan is tagged NPL, interests continue to run on knowing full well that the victim of the loan is trapped.”

“To me, banks’ ordinarily should not have been mounting interests on the marketers’ NPLs because the facility can be said to be under force majeure ever since it had been declared none performing.

He added that collecting interests on facility already declared NPL amounts to robbery and the height of sharp practices. He called on the CBN to go further and ask banks to chop off already accumulated interests at least in the last few years so that marketers can begin to work out how to pay back pending when the Federal Government would pay marketers’ their subsidy arrears.

Business Hilights is an online news channel conceptualized and structured to report and track on a daily basis; latest developments in critical business sectors to serve as a one stop news gateway for governments, foreign and indigenous investors.
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