The Central Bank of Nigeria (CBN) has directed banks to deny new credit and certain banking services to large borrowers with non-performing loans, as part of efforts to strengthen credit discipline and protect financial system stability.
In a circular dated March 12, 2026 and addressed to all banks, CBN said the directive was issued to promote a sound financial system, protect depositors and curb credit abuse within the banking sector.
The circular, signed by the Director of Banking Supervision, Olubukola Akinwunmi, requires financial institutions to immediately deny additional credit facilities to large borrowers whose loans are classified as non-performing in the Credit Risk Management System or by any licensed private credit bureau.
Under the directive, affected borrowers will not only be barred from new loans but will also be denied other direct credit and contingent banking facilities, including bankers’ confirmations, letters of credit, performance bonds and advance payment guarantees.
“Effective immediately, all financial institutions shall: Restrict further credit access: Any large-ticket obligor with a nonperforming facility recorded in the CRMS and/or any licensed private credit bureau shall not be granted additional credit facilities.
READ ALSO:
- NERC Orders DisCos to Refund Customers ₦20.33bn for Meter Payments
- $750m Renewable Electricity Project Will Catalyse $1.1bn in Private Sector Investment – REA
- CBN Tightens Instant Payment Rules, Introduces New Fraud Controls for Banks
- Nigeria to Lose 6.75m Barrels in February as Shell Starts Bonga Maintenance
- Power Outage Looms as Seplat Shuts Gas Plants for Maintenance
“For the purpose of this restriction, credit facilities include loans and other forms of direct credit. In addition, such obligors shall not be granted banking facilities or contingent liabilities such as bankers’ confirmations, letters of credit, performance bonds, or advance payment guarantees,” CBN stated.
It said the measure is intended to stop borrowers with outstanding default exposures from accumulating additional liabilities across the banking system, a practice regulators say increases systemic risk and weakens credit discipline.
Banks were also instructed to strengthen collateral coverage for existing exposures to such borrowers by obtaining additional realisable collateral where necessary.
The apex bank defined large-ticket obligors as borrowers whose exposures fall within the threshold specified under Clause 3.2(d) of the Prudential Guidelines for Deposit Money Banks in Nigeria, 2010.
This includes customers whose combined exposures across banks exceed the Single Obligor Limit as reflected in the Credit Risk Management System or in reports from licensed private credit bureaus.
It feared that such exposures could materially affect a bank’s Capital Adequacy Ratio or otherwise pose systemic risks to the financial system if left unchecked.
The latest directive reinforces an earlier circular issued on June 30, 2014, titled “Prohibition of Loan Defaulters from Further Access to Credit Facilities in the Banking System,” which aimed to prevent borrowers with delinquent loans from obtaining fresh credit from other banks.
The CBN added that it will closely monitor compliance with the directive across the banking industry, warning that any institution found in breach will face regulatory sanctions under the provisions of the Banks and Other Financial Institutions Act.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
