The Central Bank of Nigeria (CBN) has directed banks across the country to restrict certain banking services for borrowers with non-performing loans, as part of efforts to strengthen credit discipline and safeguard the stability of the financial system.
The directive was conveyed in a circular issued to financial institutions on March 12, 2026, and signed by Olubukola Akinwunmi, Director of Banking Supervision at the apex bank.
Under the new measure, borrowers whose loan facilities have been classified as non-performing and recorded in the Credit Risk Management System (CRMS) or by any licensed private credit bureau will be barred from accessing additional credit facilities from banks.
The move is aimed at tightening oversight of loan defaulters and reducing the risk posed by bad debts within Nigeria’s banking sector.
Non-performing loans refer to credit facilities for which borrowers have failed to meet scheduled repayments of principal or interest for an extended period, making them impaired assets on the books of banks.
The directive comes amid concerns about rising bad loans in the banking industry. Recent data has shown that the sector’s non-performing loan ratio climbed above the prudential threshold of five per cent after regulatory forbearance measures were withdrawn.
By limiting access to banking services for delinquent borrowers, the apex bank is seeking to reinforce responsible borrowing practices and ensure that financial institutions maintain healthier loan portfolios.
Banks are expected to comply with the directive by identifying affected borrowers through existing credit reporting systems and enforcing the restrictions in line with regulatory guidelines.
The policy forms part of the CBN’s broader strategy to improve credit risk management and maintain stability within the country’s financial sector.
