The Central Bank of Nigeria (CBN) at the breakfast risk roundtable organised by Risk Managers Association of Nigeria (RIMAN) in Lagos reminded the deposit money banks on the need to effectively implement the International Financial Reporting Standard 9 (IFRS9) by January 1, 2018.
The CBN had issued its initial Guidance Notes for IFRS 9 Implementation on December 20, 2016. Speaking at the roundtable, Ahmad Abdullahi, director, banking supervision, CBN, said. noted that all deposit money banks (DMBs) were expected to commence parallel run of the new impairment system from July 1, 2017 in order to ensure seamless transition to IFRS 9 by January 1, 2018.
“We have less 6 months to the effective date of the standards and many banks have to intensify efforts to meet the deadline”, the CBN director told participants.
“IFRS 9 would not bring the desired benefits, if it is not effectively implemented and applied consistently. “With less than 6 months to effective date, all hands have to be on deck”, Ahmad Abdullahi, said.
Banks were required to obtain their External Auditor/Independent Consultant’s validation/certification of their IFRS 9 accounting policies/systems and models by third quarter of 2017.
The Risk Managers Association of Nigeria (RIMAN) at the roundtable inaugurated work group on laws relating to credit and risk administration, Non-Performing Loans (NPLs) and related issues in the Nigerian financial institutions.
The work group consists of members of RIMAN from the financial services sector, regulators including Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC), lawyers and judicial officers.
The work group is mandated among others to facilitate, review, participate and promote initiatives towards strengthening laws relating to credit administration, risk management and debt recovery within the Nigeria business environment and recommend necessary reforms.
Welcoming the participants, Jude Monye, president, RIMAN, said “We are looking at NPL and IFRS9. IFRS9 is not just for financial institutions, it is for companies that want to go global. A lot of institutions have really not migrated into IFRS9. IFRS9 talks about how the provision accounted for in annual report whether performing or non-performing.
For the NPL, he said it is not about banks alone, energy sector also gives out credit and it also goes bad. In relation to that is the Private Asset Management Companies (PAMCs) that the government has just put in place, “how does it benefit you? You can even incorporate one. You can be by the side either by incorporating one to buying these assets or offloading assets, so you can operate from any of the two ends”.
Bisis Akodu, partner, corporate and commercial law, Olisa Agbakoba Legal, who looked at the framework on PAMCs critically, identified the major challenges the PAMCs will face to include physical and legal.
HOPE MOSES-ASHIKE
