The Central Bank of Nigeria (CBN) has directed banks to restrict certain banking services for large borrowers with non-performing loans in order to strengthen credit discipline and protect financial system stability.
In a circular dated March 12, 2026, and signed by the Director of Banking Supervision, Olubukola Akinwunmi, the CBN instructed financial institutions to deny additional credit to borrowers whose loans are classified as non-performing and recorded in the Credit Risk Management System or any licensed private credit bureau.
Under the directive, affected borrowers will not be allowed to access new loans or other forms of direct credit. They will also be restricted from obtaining banking facilities such as letters of credit, bankers’ confirmations, performance bonds, or advance payment guarantees.
The CBN explained that the restrictions apply to “large-ticket obligors,” meaning borrowers whose total exposure across banks exceeds the single obligor limit or could significantly affect a bank’s capital adequacy ratio.
Banks were also instructed to obtain additional realisable collateral from such borrowers to better secure their existing loan exposures.
The regulator said the measure is designed to reduce systemic risk in the banking sector and limit the impact of large loan defaults on financial institutions.
The directive reinforces earlier actions taken by the CBN to address credit abuse in the banking system. In 2024, the apex bank issued a similar instruction preventing loan defaulters from accessing new credit facilities.
The bank warned that it will closely monitor compliance with the directive and impose regulatory sanctions on institutions that fail to implement the rules.
Nigeria’s banking sector recorded an increase in bad loans in 2025 after the CBN ended regulatory forbearance that previously allowed banks to restructure pandemic-affected loans without classifying them as non-performing. Industry data showed that the sector’s non-performing loan ratio rose to about 7 percent, above the prudential limit of 5 percent.
