The Central Bank of Nigeria has directed banks to restrict certain banking services to individuals and companies that fail to meet their loan repayment obligations.
The move is part of efforts by the apex bank to strengthen credit discipline and reduce the level of non-performing loans within Nigeria’s financial system.
Under the directive, banks are expected to impose restrictions on customers identified as chronic loan defaulters, particularly those with significant outstanding credit facilities.
Industry analysts say the policy is aimed at discouraging borrowers from accessing new financial services while still defaulting on existing loan commitments.
The directive also reinforces the use of credit monitoring frameworks such as the Credit Risk Management System, which allows lenders to track the borrowing history of customers across the banking system.
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Financial experts believe the measure could improve loan recovery and encourage responsible borrowing, especially at a time when banks are facing increasing credit risks amid economic pressures.
The policy is also expected to strengthen the stability of Nigeria’s banking sector by ensuring that borrowers meet their financial obligations before accessing additional banking privileges.
The regulator said it will monitor compliance to ensure consistent implementation across the banking sector and warned that noncompliance would attract regulatory sanctions under the Banks and Other Financial Institutions Act (BOFIA) 2020
Market watchers say the effectiveness of the directive will depend largely on strict compliance by financial institutions and stronger enforcement mechanisms across the banking industry.
(Editor: Ebuwa Omo-Osagie)
