March 13, (THEWILL) — The Central Bank of Nigeria (CBN) has taken decisive action to protect the stability of the nation’s banking system by directing banks to restrict access to credit and certain financial services for borrowers with large non-performing loans.
In a circular dated March 12, 2026, signed by the Director of Banking Supervision, Olubukola Akinwunmi, the apex bank instructed financial institutions to immediately limit further financial exposure to customers whose loan facilities have already gone bad.
The directive specifically targets large-ticket borrowers whose defaulted loans could pose significant systemic risks. Any borrower classified as having a non-performing loan (NPL) and listed in the Credit Risk Management System (CRMS) or in records of licensed private credit bureaus will no longer be able to access new loans or similar credit facilities.
Beyond loans, affected borrowers will also be barred from banking services that create contingent obligations for banks, including letters of credit, bankers’ confirmations, performance bonds, and advance payment guarantees. Banks are also instructed to demand additional collateral to secure existing exposures.
The CBN said this measure is critical as recent data shows the industry’s NPL ratio has risen to about seven percent, surpassing the regulatory threshold of five per cent. The increase is largely attributed to the expiration of regulatory reliefs previously granted on restructured loans, which were reclassified as non-performing once the relief window closed.
“The directive is aimed at curbing further deterioration in asset quality while reinforcing borrowers’ repayment discipline”, the central bank said, noting that large exposures exceeding the Single Obligor Limit could materially affect banks’ capital adequacy and create systemic vulnerabilities.
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