The Central Bank of Nigeria (CBN) has directed banks and other financial institutions to restrict certain banking services to large loan defaulters in a move aimed at strengthening financial stability and curbing credit abuse in the banking sector.
In a circular dated March 12, 2026, and signed by the Director of Banking Supervision, Olubukola Akinwunmi, the apex bank instructed all banks to deny additional credit facilities to large-ticket obligors whose loans have become non-performing.
The circular, titled “Restriction of Banking Services to Non-Performing Large Ticket Obligors,” stated that the measure forms part of the CBN’s mandate to promote a sound financial system, protect depositors, and ensure prudential compliance within the banking industry.
According to the directive, any borrower with a non-performing facility recorded in the Credit Risk Management System (CRMS) or in the database of a licensed private credit bureau will no longer be eligible to obtain new credit facilities from banks.
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The CBN clarified that the restriction covers loans and other forms of direct credit, as well as contingent liabilities such as bankers’ confirmations, letters of credit, performance bonds, and advance payment guarantees.
The apex bank also directed financial institutions to strengthen collateral coverage for such obligors by obtaining additional realisable collateral to adequately secure existing loan exposures.
The circular further explained that large ticket obligors refer to borrowers whose credit exposure falls under Clause 3.2(d) of the Prudential Guidelines for Deposit Money Banks in Nigeria (2010), or customers whose combined exposure across banks, as recorded in the CRMS or licensed credit bureaus, exceeds the Single Obligor Limit (SOL).
It noted that such exposures could materially affect a bank’s Capital Adequacy Ratio (CAR) or otherwise pose systemic risks to the country’s financial system.
Sanctions
The CBN said the latest directive reinforces earlier regulatory measures, particularly the circular titled “Prohibition of Loan Defaulters from Further Access to Credit Facilities in the Banking System,” issued on June 30, 2014.
The regulator said the renewed enforcement aims to ensure greater consistency and effectiveness in addressing credit abuse by large-ticket borrowers.
The bank added that it will closely monitor compliance with the directive across the banking industry.
It warned that any financial institution found to be in breach of the directive will face regulatory sanctions in line with the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020.
