Lagos - Sanusi Lamido Sanusi, the Governor, Central Bank of Nigeria (CBN), on Thursday said that effective Credit Reporting Standard (CRS) would solve the problem of bad loans in the financial sector.
He said this in a message to a conference organised by the CBN and Business Development and Investment Ltd. in Lagos.
Sanusi, who was represented by Folakemi Fatogbe, the Special Adviser to the Governor and Director in the Department of Risk Management, recalled that CRS was introduced by the apex bank in 1998.
The CBN governor explained that the introduction of CRS was due to the crisis in the financial sector.
He said that investigation carried out by the CBN revealed that a lot of customers obtained loans from banks and refused to pay back.
"The same set of customers will cross to other banks to access loans and this led to the collapse of the financial sector," he said.
Sanusi expressed concern that most banks lacked the Single Customer’s Identifier that would be able to capture debtors in the financial system.
"There should be a unique customer’s identifier that will be able show whether a customer is owing a bank or not," he said.
Sanusi said that the regulatory body had taken some steps to ensure sound and healthy financial sector in the country.
He said that the apex bank had completed a guideline for banks and Bureau De Change to enhance good reporting standard in the country.
"A cap of five per cent had been introduced for non- performing loans in the financial sector, `` he said.
Sanusi said that this was part of the steps taken to improve corporate governance in the banking sector.
Taiwo Ayedun, the Managing Director, Business Development and Investment Ltd, said that the genesis of the introduction of CRS was the financial crisis in the banking sector.
Ayedun said that the memories of the collapsed banks were still fresh with Nigerians.
The theme of the conference, which would end on Friday, is: "Enhancing Financial Stability through Credit Reporting’’.
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