The Digest:
The Central Bank of Nigeria (CBN) has directed commercial banks to block loan defaulters, particularly large-ticket borrowers, from accessing new credit facilities within the banking system. In a circular issued Friday, the apex bank stated that "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 restriction covers loans, bankers' confirmations, letters of credit, performance bonds, and advance payment guarantees. The CBN also instructed banks to strengthen collateral coverage for existing exposures by obtaining additional realisable collateral from affected borrowers. The directive reinforces a similar 2014 circular and aims to safeguard the financial system and curb credit abuse by large-ticket obligors. Banks failing to comply face sanctions under BOFIA 2020.
Key Points
- CBN bars banks from granting new credit to loan defaulters, especially large-ticket borrowers.
- Restriction covers loans, letters of credit, performance bonds, guarantees.
- Banks must strengthen collateral for existing exposures.
- Reinforces 2014 directive; compliance mandatory.
- Sanctions for non-compliance under BOFIA 2020.
Sources: CBN Circular
