CBN Bars Loan Defaulters from New Credit Facilities

The Central Bank of Nigeria (CBN) has directed commercial banks to block large-ticket loan defaulters from accessing new credit facilities or certain banking services.

In a circular issued Monday, the apex bank said the move is aimed at protecting depositors and strengthening prudential compliance in the financial system.

“Any large-ticket obligor with a non-performing facility recorded in the CRMS and/or any licensed private credit bureau shall not be granted additional credit facilities,” the circular stated.

The restriction covers loans, direct credit, and contingent liabilities such as letters of credit, performance bonds, and advance payment guarantees. Banks are also required to obtain additional collateral from such obligors to secure existing exposures.

Large-ticket obligors are defined as borrowers whose combined exposure across banks exceeds the Single Obligor Limit (SOL) and materially affects a bank’s Capital Adequacy Ratio (CAR) or poses systemic risk.

The directive reinforces an earlier 2014 circular prohibiting loan defaulters from further access to credit, underscoring the CBN’s determination to curb credit abuse.

The apex bank warned that noncompliance would attract sanctions under the Banks and Other Financial Institutions Act (BOFIA) 2020.

This comes as Nigerian banks undergo a recapitalisation programme set to conclude on March 31, 2026, with about 30 banks already meeting minimum capital requirements.