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 within 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 lenders 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,” said the directive is part of the CBN’s mandate to promote a sound financial system, safeguard depositors’ funds, and ensure prudential compliance across the banking industry.
Under the directive, any borrower with a non-performing loan 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 fresh credit facilities from banks.
The restriction applies not only to loans but also to other direct credit exposures and contingent liabilities, including bankers’ confirmations, letters of credit, performance bonds, and advance payment guarantees.
The CBN further directed financial institutions to strengthen collateral coverage for such obligors by obtaining additional realisable collateral to adequately secure existing loan exposures.
According to the regulator, 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—captured in the CRMS or licensed credit bureaus—exceeds the Single Obligor Limit (SOL).
The apex bank noted that such exposures could materially affect a bank’s Capital Adequacy Ratio (CAR) or pose systemic risks to the financial system if not properly managed.
The directive also reinforces earlier regulatory action contained in a June 30, 2014 circular titled “Prohibition of Loan Defaulters from Further Access to Credit Facilities in the Banking System.”
The CBN said the renewed enforcement is intended to strengthen consistency and effectiveness in addressing credit abuse by large borrowers.
The bank added that compliance with the directive will be closely monitored across the industry, warning that any financial institution found in breach will face sanctions in line with the provisions of the Banks and Other Financial Institutions Act 2020.
