The Central Bank of Nigeria (CBN) has moved to tighten credit discipline in the banking sector by restricting access to banking services for chronic loan defaulters and large borrowers with non-performing loans.
The directive, announced on Wednesday, marks a significant shift in regulatory stance as the apex bank seeks to strengthen financial system stability and enforce stricter corporate governance standards.
The policy follows remarks by CBN Governor, Olayemi Cardoso, at the 4th Annual IMF/AFRITAC West 2 High-Level Executive Forum in Abuja, where he signalled the end of regulatory leniency for delinquent borrowers.
Cardoso emphasised that the era of forbearance is over, noting that the bank is adopting a tougher approach to protect the N4.61 trillion in fresh capital recently raised by the banking sector.
“Our stance on corporate governance is unequivocal: zero tolerance for violations. By ending years of regulatory forbearance, we have reinforced accountability, tightened supervision, and elevated compliance standards across the sector,” he said.
Under the new policy, individuals and entities classified as “large-ticket obligors” with non-performing loans in the Credit Risk Management System will be barred from accessing fresh credit as well as key banking instruments.
These include contingent liabilities such as letters of credit and performance bonds—critical tools for trade and large-scale business transactions.
The CBN said the measure is aimed at curbing “credit jumping,” where defaulters move across banks to accumulate new debts without settling existing obligations.
“We have implemented a restriction of banking services to non-performing large-ticket obligors. This decisive step underscores our commitment to credit discipline, financial integrity, and accountability,” the bank stated.
It added that the move is designed to instil a stronger repayment culture among high-profile borrowers while protecting depositors and safeguarding the broader financial system.
“By curbing access to banking services for chronic defaulters, we are reinforcing the culture of repayment, protecting depositors, and safeguarding the stability of the financial system,” the statement noted.
The development comes against the backdrop of longstanding concerns over the impact of bad loans on Nigeria’s banking sector, where large unpaid debts have historically posed risks to liquidity and depositor confidence.
In addition to the crackdown, Cardoso reaffirmed the CBN’s commitment to orthodox monetary policy, signalling a departure from interventionist strategies of the past.
According to him, the bank will focus on its core mandate of price stability, using conventional monetary tools to manage inflation and restore confidence in the naira.
“The CBN remains firmly anchored in orthodox monetary policy, focused on restoring price stability, strengthening policy credibility, and anchoring expectations through discipline and consistency,” he said.
With the new directive, the apex bank is expected to intensify oversight of lenders while compelling borrowers—particularly large corporate entities—to meet their repayment obligations or risk being shut out of the financial system.