The Central Bank of Nigeria (CBN) has instructed all commercial banks to restrict a range of services to borrowers with large, non-performing loans, a move designed to fortify the country’s financial stability and discourage credit abuse.
In a circular dated March 12, 2026, and signed by Olubukola Akinwunmi, Director of Banking Supervision, the apex bank mandated that no new credit facilities be extended to any borrower flagged as a large-ticket obligor with a non-performing exposure. The policy, titled “Restriction of Banking Services to Non-Performing Large Ticket Obligors,” is part of the CBN’s core mandate to ensure a sound banking system and protect depositors’ funds.
The restriction applies broadly to all forms of direct credit and contingent liabilities. This includes traditional loans, as well as bankers’ confirmations, letters of credit, performance bonds, and advance payment guarantees. Furthermore, banks are directed to secure existing exposures by obtaining additional, realizable collateral from these obligors.
The circular defines a “large-ticket obligor” as any borrower whose credit exposure exceeds the Single Obligor Limit (SOL) as recorded in the national Credit Risk Management System (CRMS) or licensed credit bureaus. Alternatively, it applies to those whose exposure meets the threshold in Clause 3.2(d) of the existing Prudential Guidelines. The CBN notes such concentrated exposures can materially weaken a bank’s Capital Adequacy Ratio (CAR) and pose systemic risks to the broader financial system.
This enforcement strengthens a previous 2014 circular prohibiting loan defaulters from further credit access. The CBN stated the renewed focus aims for greater consistency in mitigating risks from significant borrowers. The regulator will monitor industry compliance closely and warned that violations of the directive will incur regulatory sanctions under the Banks and Other Financial Institutions Act (BOFIA) 2020.
The action underscores a proactive regulatory approach to managing credit risk within Nigeria’s banking sector. By limiting further financial accommodations to defaulting large borrowers and demanding stronger security, the CBN seeks to contain potential contagion, safeguard depositor interests, and uphold overall financial system resilience. Financial institutions are expected to immediately integrate these restrictions into their credit risk and operational frameworks.
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