The Central Bank of Nigeria (CBN) has moved to tighten credit discipline across the banking sector, directing all financial institutions to deny additional loans and banking facilities to large-ticket borrowers whose existing loan obligations are classified as non-performing.
The directive, issued in a circular dated March 12, 2026, was signed by Olubukola Akinwunmi, Director of Banking Supervision, and addressed to all deposit money banks operating in the country.
Under the new policy, any borrower whose loan facility is recorded as non-performing in the Credit Risk Management System (CRMS) — the CBN’s centralised credit database — or flagged by any licensed private credit bureau will be immediately ineligible for new credit. The measure takes effect without transition, applying across all banks simultaneously.
The CBN’s restrictions extend beyond direct lending. Affected borrowers will also be denied access to contingent banking facilities, including bankers’ confirmations, letters of credit, performance bonds, and advance payment guarantees — instruments commonly used in trade finance and large-scale commercial transactions.
Banks have additionally been directed to obtain further realisable collateral from affected obligors to adequately secure their existing exposures. The apex bank did not specify a timeline within which this additional collateral must be obtained.
The CBN defines large-ticket obligors as borrowers whose combined exposures across all banks exceed the Single Obligor Limit, or whose outstanding obligations materially affect a bank’s Capital Adequacy Ratio (CAR) or otherwise pose systemic risks to the broader financial system.
The definition is grounded in Clause 3.2(d) of the Prudential Guidelines for Deposit Money Banks.
The identification of such obligors will be based on data captured in the CRMS and reports from licensed private credit bureaus, according to the circular.
In issuing the directive, the CBN cited the heightened risk that large non-performing obligors pose to individual banks and the wider financial system. The regulator stated that the new framework is designed to limit contagion risks and reinforce responsible lending practices across the sector.
The move reflects a broader regulatory effort to address the rise in non-performing loans (NPLs) within Nigeria’s banking sector and to ensure that institutions with significant credit exposures to distressed borrowers are not further endangered by extending new facilities to the same counterparties.
Compliance is expected from all deposit money banks with immediate effect. The CBN did not outline specific sanctions for non-compliance in the circular, though supervisory penalties under the Banks and Other Financial Institutions Act (BOFIA) 2020 would ordinarily apply.
Credit: Leadership