Unconfirmed reports from Vanguard newspapers have stated Central Bank of Nigeria (CBN) has intervened in the Etisalat Nigeria loan saga by asking the 13 commercial banks to stand down. Press reports earlier released had mentioned that the banks had taken over the telecoms firm. Here are key points from the latest CBN action:
- The instructions came directly from the CBN Governor Godwin Emefiele who spoke to the bank MDs.
- The banks were instructed to maintain the status quo regarding the debt. In other words, take no action against the company.
- The banks are to clear any moves they make regarding the Etisalat debt with the apex bank, before implementing them.
While the telco may have been granted a new lease of life, some analysts have questioned the CBN’s mode of intervention, saying the banks should not be instructed on how they recover Non Performing Loans (NPLs). The apex bank may have decided to take that step, to prevent a loss of investor confidence in the country, critical at a time the country is on the verge of recovering from a recession.
Sources close to Etisalat Nigeria have also disputed the amount owed, saying it was far less than the $1.2 billion figure mentioned by the banks. The intervention by the CBN, puts the banks under more pressure, as they would have to make provisions for the loan, thus increasing their impairment levels. For the smaller banks involved, the move means raising capital will be an even bigger priority.