CBN restricts banking services for loan defaulters

The Central Bank of Nigeria has restricted access to banking services for chronic loan defaulters and large-ticket obligors with non-performing loans, in a decisive move to strengthen credit discipline and protect the financial system.

The directive, announced on Wednesday, followed remarks by the CBN Governor, Olayemi Cardoso, at a high-level forum in Abuja, where he declared an end to regulatory forbearance for delinquent borrowers.

“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,” Cardoso stated.

Under the new policy, affected defaulters will be barred from accessing fresh credit facilities as well as key banking instruments, including trade finance tools and contingent liabilities.

“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 apex bank said.

The CBN explained that the measure is aimed at curbing “credit jumping”, where borrowers move between banks to accumulate debt without repayment, and to instil a stronger repayment culture.

“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 bank added.

The move comes as the regulator intensifies its shift towards orthodox monetary policy, prioritising price stability and stricter financial oversight to restore confidence in the banking sector.