The Central Bank of Nigeria (CBN) has said it will guarantee letters of credit (L/Cs) from Nigerian banks during the coronavirus pandemic and has asked correspondent banks and creditors to Nigerian lenders not to panic over L/Cs and other obligations extended to Nigerian businesses.

Bankers in India meanwhile are asking their central bank to extend the time period for classification of non-performing assets on short term loans, including L/Cs.

Nigerian guarantees

The CBN has said it will guarantee all L/Cs from Nigerian banks, on behalf of their customers, to their correspondent banks abroad.

According to CBN's governor, Godwin Emefiele, Nigeria's apex bank will engage with correspondent banks and trading partners on matters related to L/Cs and trade commitments with Nigerian banks on behalf of Nigerian companies.

Çall for RBI action

Meanwhile, the Indian Banks' Association is calling on the Reserve Bank of India (RBI) for an extension of the time period for classification of non-performing assets on short term loans, including L/Cs as well as like cash credits, overdraft and guarantees from the present 90 days to 180 days.

Indian bankers want the RBI to extend loan recovery times to give borrowers struggling with cash flow problems caused by India's coronavirus lockdown more time to pay.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.