LAGOS, March 13, 2026 - The Central Bank of Nigeria has ordered commercial banks to stop providing loans and other banking services to large borrowers with unpaid debts, citing risks to the stability of the financial system.
In a circular issued on March 12, the apex bank directed all financial institutions to immediately restrict credit access for customers classified as non-performing large-ticket obligors. The directive applies to borrowers whose unpaid loans are recorded in the Credit Risk Management System or by licensed private credit bureaus .
The circular, signed by Olubukola A. Akinwunmi, director of banking supervision, said the measure aims to promote a sound financial system, protect depositors, and strengthen compliance within the banking sector .
Under the new rules, affected borrowers will not only be denied new loans but will also lose access to other banking facilities. These include bankers' confirmations, letters of credit, performance bonds, and advance payment guarantees - financial tools commonly used in trade and large commercial transactions .
The central bank defined large-ticket obligors under Clause 3.2(d) of the Prudential Guidelines for Deposit Money Banks from 2010. These are borrowers whose total debt across multiple banks exceeds the Single Obligor Limit, or whose unpaid loans could materially affect a bank's Capital Adequacy Ratio . Such exposures can pose systemic risks to the financial system if left unchecked, the regulator said .
Banks have also been instructed to obtain additional realisable collateral from affected borrowers to secure existing loan exposures . The central bank did not specify a deadline for compliance with this requirement.
The directive reinforces an earlier circular issued on June 30, 2014, which sought to prevent loan defaulters from accessing fresh credit from other banks . The CBN said the renewed measure is intended to ensure consistency and effectiveness in curbing credit abuse among high-value borrowers .
The move comes as Nigeria's banking sector faces rising non-performing loans. Industry data shows the NPL ratio climbed to about seven percent in 2025, above the regulatory threshold of five percent . The increase followed the expiration of pandemic-era reliefs that had allowed banks to restructure loans without classifying them as non-performing .
Under banking rules, a loan is classified as non-performing when a borrower misses repayments for 90 days or more .
The central bank said it will monitor compliance across the banking industry and warned that institutions found in breach will face regulatory sanctions under the Banks and Other Financial Institutions Act 2020 .
The directive targets borrowers whose defaulted loans pose significant risk, but does not apply to all loan defaulters. Small borrowers with unpaid debts below the large-ticket threshold are not affected by the restrictions .