The Central Bank of Nigeria (CBN) has announced an extension, by 12 months, of the regulatory forbearance it approved for the restructuring of credit facilities of banks and Other Financial Institutions (OFIs) due to the COVID-19 crisis.
It has also approved the extension by another 12 months, to February 28, 2022, for the reduction in interest rate for its intervention facilities. As part of measures to mitigate the impact of the Coronavirus (COVID-19) pandemic on the nation’s economy, the CBN reduced the interest rate on its intervention facilities from 9 per cent to 5 per cent per annum for one year, effec-tive March 1, 2020.
In addition, for credit facilities disbursed through participating banks and OFIs, the regulator also granted a one-year moratorium on all principal payments with effect from March 1, 2020. However, following the expiration of the timelines, the apex bank, in a circular to banks and OFIs posted on its website yesterday, announced that it had approved the extension by another 12 months to February 28, 2022 for the reduction in interest rate for its intervention facilities.
It also stated that the roll-over of the moratorium on the facilities will be “considered on a case by case basis.” In his personal statement at the January meeting of the CBN’s Monetary Policy Committee (MPC) meeting, Deputy Governor in charge of Economic Policy at the apex bank, Dr. Kingsley Obiora, had said that although the Non- Performing Loans (NPLs) ratio in the country is currently only slightly above the CBN’s benchmark of +5%, he was in support of extending the regulatory forbearance for restructuring of credit facilities by an additional 12 months.