Obinna Chima

The Central Bank of Nigeria (CBN) wednesday directed commercial banks to review and make adequate provisioning for all delinquent foreign currency-denominated loans in line with the July 1, 2010 Prudential Guidelines for Deposit Money Banks in Nigeria.

The CBN, which also settled futures contract valued at N962.23 million, said in a letter by its Director, Banking Supervision, Mrs. Tokunbo Martins, titled: “Provisioning for Foreign Currency Loans,” dated July 27, posted on the bank’s website, that the move was in continuation of the efforts to enhance efficiency, facilitate liquidity and transparency in the foreign exchange market.


Rationalising why it had become necessary to ensure adequate and proper provisioning, the central bank directed banks to ensure that the un-provisioned portion of all foreign currency-denominated loans and advances in their books are fully provided for immediately in their income statements.

The letter read in part: “One of the effects of the Guidelines, which liberalised the foreign exchange market, is the increase in balances on foreign currency-denominated loans and advances in the books of banks, especially facilities that had been fully provided for under the previous exchange rate regime, but were yet to be written off, per our extant regulation under Section 3.21(a) of the Prudential Guidelines for Deposit Money...<<<read more by clicking the link below>>>
http://www.forexpot.com/cbn/cbn-directs-banks-provide-foreign-currency-loans-settles-futures-contract/