CBN Orders Banks to Restrict Services to Large Loan Defaulters

The Central Bank of Nigeria (CBN) has directed all banks in the country to restrict banking services to large borrowers with non-performing loans, in a move aimed at strengthening financial stability and reducing risks in the banking sector.

In a circular dated March 12, 2026, and addressed to all financial institutions, the apex bank said the directive targets “non-performing large ticket obligors” whose debt exposures could pose a systemic risk to the financial system.

Under the new directive, banks are required to deny additional credit facilities to any large borrower whose loan has been classified as non-performing and recorded in the Credit Risk Management System (CRMS) or any licensed private credit bureau.

The restriction covers all forms of credit, including loans and other direct lending facilities. Banks have also been instructed not to extend contingent banking services such as letters of credit, performance bonds, banker’s confirmations, or advance payment guarantees to such borrowers.

The CBN further directed banks to strengthen collateral coverage by obtaining additional realizable collateral from affected borrowers in order to secure existing exposures.

According to the apex bank, large ticket obligors are borrowers whose total exposure meets the threshold outlined in the Prudential Guidelines for Deposit Money Banks in Nigeria or whose combined borrowings across banks exceed the Single Obligor Limit (SOL), thereby posing potential risks to banks’ Capital Adequacy Ratio (CAR).

The directive forms part of the regulator’s efforts to protect depositors, enforce prudential compliance, and maintain stability within Nigeria’s banking system.