The Central Bank of Nigeria (CBN) has issued a directive to all Nigerian banks to restrict access to certain banking services for large-ticket obligors with non-performing loans (NPLs). This move, communicated via a letter dated March 12, 2026, is intended to strengthen the credit framework, improve credit discipline, protect capital buffers, and ultimately enhance the financial stability of the banking ecosystem.
The directive comes in response to a recent increase in NPLs. Following a regulatory forbearance period that ended in June 2025, the sector experienced a rise in NPLs, with the ratio reaching 7%, surpassing the prudential ceiling of 5%. This increase was attributed to the payment obligations on restructured loans becoming due after the forbearance period concluded.
Non-performing loans are defined as sums of borrowed money for which the debtor has not made scheduled payments for at least 90 days. They serve as a key indicator of a country's financial development and the credit quality of banks' loan portfolios. Low NPLs signify increased capital buffers and robust profitability, enabling the economy to absorb losses and safeguard against shocks. Conversely, high NPLs indicate low credit quality and can negatively impact financial stability. Research suggests that a 1% increase in bank stability can lead to a 3.895% increase in economic growth, underscoring the importance of the CBN's objective to promote a sound financial system.
In parallel financial operations, the CBN allotted a total of N894.17 billion at its Treasury Bills Primary Market Auction held on April 22, 2026. The auction saw significant investor demand, with total subscriptions surging to N2.36 trillion against an offer of N750 billion across the 91-day, 182-day, and 364-day tenors. The CBN increased allotments, particularly for the 364-day bill, which attracted N2.12 trillion in subscriptions against an offer of N550 billion, with N753.45 billion allotted. Stop rates remained stable across all maturities, with the 91-day bill at 15.95%, the 182-day at 16.19%, and the 364-day at 16.20%.
Furthermore, President Bola Ahmed Tinubu announced that the CBN is actively resolving outstanding financial liabilities, a move he stated marks a significant turning point in strengthening Nigeria’s economic and aviation ties with the United Kingdom. Speaking after a meeting with a British Airways delegation celebrating 90 years of operations in Nigeria, the President highlighted that his administration has prioritized addressing financial bottlenecks that previously strained relationships with international airlines. He emphasized the need for Nigeria’s aviation sector to meet global standards to attract investment and improve connectivity.
