CBN suspends loan applications, banks now responsible for recovery

By Abiodun OBA

Applications for new loans under the Central Bank of Nigeria, CBN, development finance intervention funds have been suspended.

The decision was disclosed in a circular to the Chief Executive of banks, signed by Acting Director, Development Finance Department, Sa’ad Hamidu.

The CBN further announced that it had commenced pullback from direct development financing interventions. The Apex bank added that the banks are now responsible for the recovery of loans granted so far under the development finance intervention funds.

The circular is titled “Suspension of Acceptance of New Applications under the Existing Central Bank of Nigeria, CBN Development Finance Intervention Programme”.

The circular stated: “In furtherance of the Central Bank of Nigeria’s (CBN) new policy thrust focusing on its core mandate of ensuring price and monetary stability, the Bank has commenced its pullback from direct development financing interventions.

“Accordingly, the CBN would be moving into more limited policy advisory roles that support economic growth.

“In consideration of the above, the CBN wishes to inform you that it has stopped accepting new loans applications for processing under any of its existing intervention programmes and schemes.

“It is important that you communicate this to your customers. And kindly note that the interest rates, as well as other terms and conditions on all existing facilities, remain as contained therein in their respective approval letters.

“You may also wish to note that your bank shall be responsible for the recovery of the outstanding balance on all facilities previously accessed through your bank.”