The Central Bank of Nigeria (CBN) has taken a firm step to tighten credit discipline in the country’s banking sector by instructing banks to restrict access to certain banking services for large borrowers with non-performing loans. The move is aimed at safeguarding financial system stability and limiting risks posed by high-value defaulters.
The directive, issued in a letter dated March 12, 2026, and signed by Olubukola Akinwunmi, Director of Banking Supervision, targets borrowers whose loans are classified as non-performing and recorded in the Credit Risk Management System (CRMS) or any licensed private credit bureau. These borrowers will no longer be eligible for additional credit facilities.
According to the CBN, the restriction covers all forms of direct credit, including loans, and extends to banking facilities such as letters of credit, bankers’ confirmations, performance bonds, and advance payment guarantees. Banks are also required to obtain additional realisable collateral from affected borrowers to adequately secure their existing exposures.
Large-ticket obligors, defined as borrowers whose combined exposure across banks exceeds the Single Obligor Limit and could materially affect a bank’s Capital Adequacy Ratio or pose systemic risks, are the focus of this policy. The CBN said it would rely on CRMS data and reports from licensed private credit bureaus to identify such exposures.
This is not the first time the apex bank has issued similar directives. In June 2024, the CBN also prohibited loan defaulters from accessing further credit in a bid to curb credit abuse. The regulator stated that the latest measures reinforce previous efforts and warned that non-compliance would attract sanctions under the Banks and Other Financial Institutions Act (BOFIA) 2020.
The move comes amid rising concerns over the quality of loans in the banking sector. Following the end of pandemic-related regulatory forbearance, which had allowed banks to restructure loans without classifying them as non-performing, the sector’s Non-Performing Loans ratio rose to an estimated 7% in 2025, exceeding the prudential ceiling of 5%. The CBN said the increase reflected previously restructured loans that could no longer receive special consideration, highlighting the need for stricter credit discipline.
This latest directive signals the CBN’s determination to strengthen oversight and ensure that banks maintain a more resilient financial system in the face of growing credit risks.
