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CBN to Publish New List of Bank Debtors

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In an effort to forestall another build up of non-performing loans (NPLs) in the banking industry, the Central Bank of Nigeria (CBN) and deposit money banks (DMBs) in the country yesterday disclosed plans to publish the names of new bank debtors.

In addition, the central bank said it might be compelled to stop such loan defaulters from accessing FOREIGN EXCHANGE through the interbank FOREIGN EXCHANGE market.

The Director, Banking Supervision, CBN, Mrs. Tokunbo Martins, who disclosed this while briefing journalists at the end of the 321st Bankers’ Committee meeting in Lagos, said the names of those she described as “chronic debtors” would be published alongside the companies they represent, their directors, subsidiaries and other associates.

Martins who declined to give a specific date or period when the names would be published as well as the total amount owed by the debtors, said banks are currently compiling the names.

She said that the decision was aimed at preventing another banking crisis.
The central bank director explained: “The CBN has managed to keep the banking industry safe and sound in collaboration with all members of the Bankers’ Committee.

“But some data shows that it is increasingly becoming difficult for some debtors to pay up their loans. So it was decided that going forward, one thing that we may do is to stop them from getting access to foreign exchange.

“Another thing that we also considered going forward is to publish the names of the borrowers that refuse to pay up. This is to ensure the continuous safety and soundness of the banking industry.

“It is not all debtors, it is the bad and chronic debtors, those ones that have deliberately refused to pay, those are the ones we are talking about.”
Martins, who put the current banking industry’s NPLs at 3.3 per cent, maintained that the central bank wants to ensure that the figure does not exceed the five per cent limit.

“Total loans in the industry are in the region of N13 trillion. Right now, we have not reached the upper limit of five per cent on NPLs, but we don’t want to get there. That was why we decided that we need to come out with this measure.
“It is not only the names of the bad debtors, the directors, the subsidiaries and every member of the board that would have their names published,” she added.

Responding to a question on what would happen if a debtor or his firm decides to source FOR FOREX from other market sources, the central bank director said: “There is no way we can stop the bank debtors from purchasing forex at the parallel market, but that will come to them at a cost because it is more expensive there. What we are more concerned with is the official market.

“You recall how much was spent by the Asset Management Corporation of Nigeria (AMCON) to clear up toxic loans and so we just want to make sure we are proactive and that we don’t go back to a situation like that.

“There was a time we had NPLs at 2.5 per cent and 3 per cent, 3.3 per cent and so it is important that we take action now and not wait till it is too late.”

Also speaking at the media briefing, the Managing Director/Chief Executive Officer, Union Bank of Nigeria Plc, Mr. Emeka Emuwa revealed plans by banks to reduce the limit on the usage of naira debit cards abroad.

Emuwa said the committee took the decision because of some cases of card abuse abroad, which he stressed was also a threat to EXCHANGE RATE stability.

The limit currently is $150,000 per annum, but this would come down to a more practical level, he said, adding: “Whether you are using your card domestically or internationally, will not be affected.”

The Union Bank boss explained: “We did find that in a number of cases people were using the cards in a manner that they were not expected to use them and there have been cases of arbitrage. So in order to sustain stability, what was agreed by the committee was that the limit for the use of the naira debit cards would be reduced.

“As a customer, if you have a dollar account, you will still have unfettered access to it, but for naira debit accounts, the limit would be reduced to a more judicious level.

“This specifically refers to the use of these cards abroad because when they are used abroad, the merchants have to be settled.
“Even if it is at ATMs, the service provider, Visa or MasterCard, has to be settled in foreign currency and we find that it is a drain on the foreign resources available to FINANCE our industries.
“So there is going to be a reduction in the annual allowable draw down using naira debit cards abroad.”

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WAIVER CESSATION: Igbokwe urges NIMASA to evolve stronger collaboration with Ships owners

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…Stresses the need for timely disbursement of N44.6billion CVFF***

Highly revered Nigerian Maritime Lawyer, and Senior Advocate of Nigeria (SAN), Mike Igbokwe has urged the Nigeria Maritime Administration and safety Agency (NIMASA) to partner with ship owners and relevant association in the industry to evolving a more vibrant merchant shipping and cabotage trade regime.

Igbokwe gave the counsel during his paper presentation at the just concluded two-day stakeholders’ meeting on Cabotage waiver restrictions, organized by NIMASA.

“NIMASA and shipowners should develop merchant shipping including cabotage trade. A good start is to partner with the relevant associations in this field, such as the Nigeria Indigenous Shipowners Association (NISA), Shipowners Association of Nigeria (SOAN), Oil Trade Group & Maritime Trade Group of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA).

“A cursory look at their vision, mission and objectives, show that they are willing to improve the maritime sector, not just for their members but for stakeholders in the maritime economy and the country”.

Adding that it is of utmost importance for NIMASA to have a through briefing and regular consultation with ships owners, in other to have insight on the challenges facing the ship owners.

“It is of utmost importance for NIMASA to have a thorough briefing and regular consultations with shipowners, to receive insight on the challenges they face, and how the Agency can assist in solving them and encouraging them to invest and participate in the maritime sector, for its development. 

“NIMASA should see them as partners in progress because, if they do not invest in buying ships and registering them in Nigeria, there would be no Nigerian-owned ships in its Register and NIMASA would be unable to discharge its main objective.

The Maritime lawyer also urged NIMASA  to disburse the Cabotage Vessel Financing Fund (CVFF)that currently stands at about N44.6 billion.

“Lest it be forgotten, what is on the lips of almost every shipowner, is the need to disburse the Cabotage Vessel Financing Fund (the CVFF’), which was established by the Coastal and Inland Shipping Act, 2003. It was established to promote the development of indigenous ship acquisition capacity, by providing financial assistance to Nigerian citizens and shipping companies wholly owned by Nigerian operating in the domestic coastal shipping, to purchase and maintain vessels and build shipping capacity. 

“Research shows that this fund has grown to about N44.6billion; and that due to its non-disbursement, financial institutions have repossessed some vessels, resulting in a 43% reduction of the number of operational indigenous shipping companies in Nigeria, in the past few years. 

“Without beating around the bush, to promote indigenous maritime development, prompt action must be taken by NIMASA to commence the disbursement of this Fund to qualified shipowners pursuant to the extant Cabotage Vessel Financing Fund (“CVFF”) Regulations.

Mike Igbokwe (SAN)

“Indeed, as part of its statutory functions, NIMASA is to enforce and administer the provisions of the Cabotage Act 2003 and develop and implement policies and programmes which will facilitate the growth of local capacity in ownership, manning and construction of ships and other maritime infrastructure. Disbursing the CVFF is one of the ways NIMASA can fulfill this mandate.

“To assist in this task, there must be collaboration between NIMASA, financial institutions, the Minister of Transportation, as contained in the CVFF Regulations that are yet to be implemented”, the legal guru highlighted further. 

He urged the agency to create the right environment for its stakeholders to build on and engender the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders.

“Lastly, which is the main reason why we are all here, cessation of ministerial waivers on some cabotage requirements, which I believe is worth applause in favour of NIMASA. 

“This is because it appears that the readiness to obtain/grant waivers had made some of the vessels and their owners engaged in cabotage trade, to become complacent and indifferent in quickly ensuring that they updated their capacities, so as not to require the waivers. 

“The cessation of waivers is a way of forcing the relevant stakeholders of the maritime sector, to find workable solutions within, for maritime development and fill the gaps in the local capacities in 100% Nigerian crewing, ship ownership, and ship building, that had necessitated the existence of the waivers since about 15 years ago, when the Cabotage Act came into being. 

“However, NIMASA must ensure that the right environment is provided for its stakeholders to build and possess the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders. Or better still, that they are solved within the next 5 years of its intention to stop granting waivers”, he further explained. 

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Breaking News: The Funeral Rites of Matriarch C. Ogbeifun is Live

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The Burial Ceremony of Engr. Greg Ogbeifun’s mother is live. Watch on the website: www.maritimefirstnewspaper.com and on Youtube: Maritimefirst Newspaper.

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Wind Farm Vessel Collision Leaves 15 Injured

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…As Valles Steamship Orders 112,000 dwt Tanker from South Korea***

A wind farm supply vessel and a cargo ship collided in the Baltic Sea on Tuesday leaving 15 injured.

The Cyprus-flagged 80-meter general cargo ship Raba collided with Denmark-flagged 31-meter wind farm supply vessel World Bora near Rügen Island, about three nautical miles off the coast of Hamburg. 

Many of those injured were service engineers on the wind farm vessel, and 10 were seriously hurt. 

They were headed to Iberdrola’s 350MW Wikinger wind farm. Nine of the people on board the World Bora were employees of Siemens Gamesa, two were employees of Iberdrola and four were crew.

The cause of the incident is not yet known, and no pollution has been reported.

After the collision, the two ships were able to proceed to Rügen under their own power, and the injured were then taken to hospital. 

Lifeboat crews from the German Maritime Search and Rescue Service tended to them prior to their transport to hospital via ambulance and helicopter.

“Iberdrola wishes to thank the rescue services for their diligence and professionalism,” the company said in a statement.

In the meantime, the Hong Kong-based shipowner Valles Steamship has ordered a new 112,000 dwt crude oil tanker from South Korea’s Sumitomo Heavy Industries Marine & Engineering.

Sumitomo is to deliver the Aframax to Valles Steamship by the end of 2020, according to data provided by Asiasis.

The newbuild Aframax will join seven other Aframaxes in Valles Steamship’s fleet. Other ships operated by the company include Panamax bulkers and medium and long range product tankers.

The company’s most-recently delivered unit is the 114,426 dwt Aframax tanker Seagalaxy. The naming and delivery of the tanker took place in February 2019, at Namura Shipbuilding’s yard in Japan.

Maritime Executive with additional report from World Maritime News

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