- Financial Reports: CBN Directs Banks to Implement IFRS9
The Central Bank of Nigeria has asked commercial banks to implement the International Financial Reporting Standard 9 on or before January 1, 2018 deadline.
The Director, Banking Supervision, CBN, Ahmad Abdullahi, stated this at a breakfast roundtable organised by the Risk Managers Association of Nigeria, in collaboration with Olisa Agbakoba Legal Limited in Lagos.
Abdullahi said that all Deposit Money Banks were expected to commence parallel run of a new loan impairment system from July 1, 2017 in order to ensure a seamless transition to IFRS 9 by January 1, 2018.
“We have less than six months to the effective date of the standard (IFRS 9) and many banks have to intensify efforts to meet the deadline,” the CBN director said.
“The IFRS 9 would not bring the desired benefits if it is not effectively implemented and applied consistently; with less than six months to the effective date, all hands have to be on deck,” he added.
At the roundtable, RIMAN inaugurated a work group on laws relating to credit and risk administration, non-performing loans and related issues in the nation’s financial system.
The work group, which was inaugurated by the President of RIMAN, Mr. Jude Monye, consists of RIMAN members from the financial services sector, CBN, Nigeria Deposit Insurance Corporation and lawyers.
According to Monye, the group is mandated, among other things, to facilitate, review, participate and promote initiatives towards strengthening the laws relating to credit administration, risk management and debt recovery in the country’s business environment and recommend necessary reforms.
While welcoming the participants, the RIMAN president said, “We are looking at the NPL and the IFRS9. The 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 the IFRS9. The IFRS9 talks about how loan provisions are accounted for in annual report whether performing or non-performing.
“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 Company that the government has to put in place.
Partner, Corporate and Commercial Law, Olisa Agbakoba Legal Limited, Bisi Akodu, examined the framework on PAMCs and identified legal issues as one of the major challenges it would likely face.