The Central Bank of Nigeria on Thursday admitted that the volume of non-performing loans in the banking system was now rising following the economic downturn currently hitting the country.
As such, the CBN said it had issued circulars advising the banks to retain more of their earnings in anticipation of the risks that the rising NPLs might pose to their balance sheets.
The Director, Banking Supervision, CBN, Mrs. Tokunbo Martins, stated this at the end of the 326th meeting of the Bankers Committee held at the central bank Lagos office.
The committee comprises the chief executive officers of the 22 banks in the country, the CBN governor and its top officials, and some key government agencies in the financial services sector.
Like the CBN Monetary Policy Committee, the Bankers Committee meets once every two months to discuss developments in the economy and take some key decisions.
Martins said, “Well, we all know that there have been an economic downturn and things are hard at the moment. We have spoken about the falling oil prices. So, non-performing loans going up is not unexpected, it is normal. If people are finding it difficult to get paid their salaries and are not able to pay their loans, it is not unexpected.”