CBN restricts banking services for non-performing loan debtors

The Central Bank of Nigeria (CBN) has directed banks to restrict access to certain banking services for large-ticket borrowers with non-performing loans.

The directive, contained in a letter sent to all banks dated March 12, 2026, states that borrowers whose loan facilities are classified as non-performing will no longer be eligible to access additional credit facilities.

The measure applies to loans recorded in the Credit Risk Management System or any licensed private credit bureau, according to the apex bank.

The CBN said the restriction aims to limit the risks posed by large-ticket obligors whose loan defaults could threaten the stability of the banking sector.

Affected borrowers shall also not be granted banking facilities or contingent liabilities such as bankers’ confirmations, letters of credit, performance bonds, or advance payment guarantees.

Banks have been directed to obtain additional realisable collateral from affected borrowers to adequately secure their existing exposures.

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Large-ticket obligors include borrowers whose combined exposure across banks exceeds the Single Obligor Limit and whose obligations materially affect a bank’s Capital Adequacy Ratio.

The definition also covers borrowers whose exposures pose systemic risks to the financial system, according to the circular.

This is not the first time the CBN has issued this type of directive, having issued a similar order on June 30, 2024, prohibiting loan defaulters from further access to credit facilities.

The CBN said it would monitor compliance and warned that non-compliance will attract appropriate regulatory sanctions.

Nigeria’s banking sector saw a fresh rise in bad loans in 2025 after the CBN withdrew regulatory forbearance, with the industry’s non-performing loans ratio climbing to an estimated 7 per cent.

This figure exceeds the prudential ceiling of 5 per cent set by the regulator for the banking industry.

The non-performing loans restriction reinforces the CBN’s efforts to curb credit abuse and protect financial system stability.