BY Oluseyi Awojulugbe
The Central Bank of Nigeria (CBN) has directed banks in the country to obtain the credit history of customers before approving loan applications.
The directive was contained in the Consumer Protection Guidelines on Responsible Business Conduct document released by the apex bank on Monday.
It said this, amongst other rules, would ensure that consumers’ capability to repay credits is efficiently assessed.
“Obtain the credit history of consumers from the Credit Risk Management System, Credit Bureaux and other sources of credit reference to ascertain consumers’ outstanding debt obligations and repayment history before advancing credits,” the document read.
It also mandated that banks must offer an alternative repayment method for customers who are unable to meet their repayment obligations due to ill health, unemployment or other disabilities.
In the event of a loan default, the regulatory guideline states that banks must give customers a “minimum period of 6 months from the date of notice of foreclosure, the option of a private sale before commencing foreclosure”.
It also mandates that banks must:
The apex bank said financial institutions that fail to comply with the regulations will be sanctioned with fines provided in the CBN Act and Banking and other Financial Institutions Act.
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