The Central Bank of Nigeria has directed commercial banks and other financial institutions across the country to limit certain banking services for borrowers who have defaulted on large loans.
The new measure is part of efforts by the apex bank to strengthen financial discipline and protect the stability of Nigeria’s banking system.
In a circular issued on March 12, 2026, and signed by the Director of Banking Supervision, Olubukola Akinwunmi, the regulator instructed banks to stop granting new credit facilities to borrowers whose existing large loans have become non-performing.
The directive, titled “Restriction of Banking Services to Non-Performing Large Ticket Obligors,” explained that the policy is intended to ensure sound financial practices within the banking industry, safeguard depositors’ funds, and enforce strict compliance with prudential regulations.
Under the new rule, any customer with a non-performing loan listed in the Credit Risk Management System (CRMS) or recorded in the database of a licensed credit bureau would no longer be eligible to obtain additional loans from banks.
The apex bank clarified that the restriction goes beyond ordinary loans.
It also covers other credit-related services such as bankers’ confirmations, letters of credit, performance bonds, and advance payment guarantees financial instruments often used in large commercial transactions.
In addition to denying further credit, banks have been instructed to strengthen the security on existing loans by demanding additional collateral from affected borrowers.
The aim, according to the regulator, is to ensure that outstanding loan exposures are adequately backed by realisable assets.
The CBN explained that “large ticket obligors” refer to borrowers whose loan exposure falls within the category defined under Clause 3.2(d) of the prudential guidelines for deposit money banks.
It also included customers whose total credit exposure across several banks exceeds the Single Obligor Limit (SOL) as recorded in the CRMS or recognised credit bureaus.
Such high-value loans, the bank noted, could significantly affect a financial institution’s Capital Adequacy Ratio (CAR) if they become non-performing, thereby posing risks to the overall financial system.
The central bank stated that the new directive reinforces an earlier policy introduced on June 30, 2014, which barred loan defaulters from accessing additional credit within the banking system.
By strengthening enforcement of the earlier rule, the regulator hopes to curb persistent credit abuse by major borrowers and promote responsible lending practices among financial institutions.
The CBN also warned that it would closely monitor compliance with the directive across the banking sector.
Any bank or financial institution found to have violated the order would face regulatory penalties under the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020.
