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 IFRS 9 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 IFRS 9 . The IFRS 9 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.