The (CBN) has directed commercial banks across to impose strict restrictions on major loan defaulters in a move aimed at strengthening financial system stability.
According to the apex bank, borrowers classified as “large-ticket obligors” with non-performing loans will no longer be allowed to access additional credit facilities or certain banking services.
Crackdown on High-Value Loan Defaulters
In a circular issued to financial institutions, the CBN explained that the directive targets borrowers whose unpaid debts pose potential risks to the banking sector.
Under the new policy, individuals or companies with large outstanding loans recorded in the Credit Risk Management System (CRMS) or other licensed credit bureaus will be barred from obtaining further loans or direct credit facilities.
The regulator said the measure forms part of its efforts to promote a stronger and more stable financial system while protecting depositors.
Restrictions on Key Banking Services
The circular also outlines several banking services that will be restricted for affected borrowers.
Banks are now prohibited from providing facilities such as:
- Letters of credit
- Performance bonds
- Bankers’ confirmations
- Advance payment guarantees
- Other contingent liabilities
Financial institutions have also been directed to request additional collateral from such borrowers to secure existing credit exposures.
Who the CBN Calls “Large-Ticket Obligors”
The CBN described large-ticket obligors as borrowers whose total debt exposure exceeds the Single Obligor Limit (SOL) under the country’s prudential banking guidelines.
These borrowers typically have loans that significantly affect a bank’s Capital Adequacy Ratio (CAR) or pose a broader systemic risk to the financial sector.
The apex bank noted that the directive reinforces an earlier policy introduced in 2014 aimed at preventing loan defaulters from accessing new credit facilities within the banking system.
Banks Warned Against Non-Compliance
The regulator warned that banks failing to comply with the directive would face sanctions under the .
It also confirmed that regulatory authorities will closely monitor compliance across the banking industry to ensure consistent enforcement.
Directive Comes Amid Bank Recapitalisation
The policy comes as Nigerian banks continue a major recapitalisation exercise introduced by the CBN in 2024 to strengthen the financial sector.
The programme is expected to be completed by March 31, with about 30 banks already meeting the new minimum capital requirements.
Analysts believe the new directive is part of broader efforts by regulators to reduce credit risk, improve lending discipline, and maintain financial stability within the banking sector.
