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The
Bankers’ Committee of the Central Bank of Nigeria (CBN) yesterday
resolved to effect some amendment to the prudential guidelines issued
early this month, detailing criteria by banks for classification of
non-performing loans.

Though the full
amended guidelines is expected to be released in the next two weeks,
Sterling Bank’s managing director, Yemi Adeola, told journalists at the
end of the committee’s meeting in Abuja that members decided to expunge
the provision that makes it mandatory for banks to set aside two
percent of their loans portfolio for general loans provision.

“We believe with
the level of cleanup that has been done in the industry so far, there
is really no need for such general loan loss provision,” he said,
pointing out that removing such provision would make it easier for
banks to grant credits to the real sector of the economy as well as
facilitate continuous extension of credits to the general public.

The committee,
which also reviewed the performance of the economy in the last quarter,
the financial market operations and regulatory issues, also resolved to
evaluate current impact of the automated teller machine (ATM) on the
banking penetration in the economy.

Managing director
of First Bank Nigeria Limited, Bisi Onasanya, said a sub-committee was
constituted to re-evaluate the capacities and competencies of the three
licensed outsourcing companies selected to manage the machines to
ensure uninterrupted services prior to the proposed shared
infrastructure and services phase in the industry.

Due to the
multiplicity of ATMs in some off site locations across the country, Mr.
Onasanya said a decision was taken that banks should limit their
deployment of the facility to their branches, while allowing
professional outsourcing companies to handle the deployment of ATMs in
off site locations.

Deliver better value

However, following
concerns by most banks about the need to verify the capacities of the
out sourced agencies to maintain the facilities, he said the
re-evaluation became necessary not only to ensure discipline and
effective coordination, but to also guarantee adequate maintenance and
management of the facilities to ensure that the final model that would
be rolled out would be able to deliver better value to the banking
public.

“The committee has
been given two weeks to re-evaluate the proposed model to identify
issues that need to be resolved before the deadline for banks to hand
over their ATMs to these outsourcing companies. The sub-committee will
evaluate the capacities and financial strengths of the three licensed
ATM outsourcing switch company – Corporati, Interswitch and Chams –
with a view to ensuring that they possess the necessary muscle to not
only continuously maintain the ATMs, but also to replace them when the
need arises.

“This is part of
efforts to ensure that the handing over of these ATMs to these private
institutions does not fail, considering that it will form the bedrock
of the ongoing effort to establish the process of shared infrastructure
and services in the nation’s banking sector,” he explained.

Tenure for directors

On Code of
Corporate governance validating the tenure of non-executive directors
of the banks, CBN’s director of banking supervision, Sam Oni, said four
years of three terms was prescribed, pointing out that to qualify for
re-appointment as directors, the regulatory authorities will administer
continuous assessment of their performance every two years as a
certification process to help assess and evaluate their performance on
an ongoing basis.

“It is the responsibility of the directors to ensure that their
institutions are well run in a firm and sound manner,” he said. “The
assessment would be guided by the type of contributions by the director
as reflected in the minutes of the books of the company and the report
of the expert auditors of the performance of the director as well as
other criteria to confirm that the director can continue in office.”