By Erhuvwu Etarhienyo
CBN unveils guidelines to enhance how banks handle loans
The Central Bank of Nigeria (CBN) has rolled out fresh guidelines for commercial banks to improve transparency and ensure consistency in the way credit information is reported across the industry.
The directive, contained in a letter dated 13 June 2025 and signed by Olubukola A. Akinwunmi, Director of Banking Supervision, follows a series of inspections that uncovered inconsistencies in loan data provided by some banks.
The CBN noted that several credit printouts did not match customers’ files or previous examination records, raising concerns about data accuracy and risk management practices.
To address the gaps, the apex bank has mandated that all loans must retain a consistent contract number from the date they are issued until repayment. If a contract number is missing, banks must provide evidence that the loan has been fully settled; otherwise, such loans will be considered written off and classified as “lost.”
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The CBN also stressed that the original disbursement date of a loan must remain unchanged, even when a facility is restructured or increased. Any changes must be separately documented and backed by written evidence of the borrower’s request and revised loan terms.
In addition, the new rules place tighter controls on the use of repayment structures, particularly “yearly” and “bullet” plans. These are now restricted to a maximum of 10 percent of a bank’s total loan portfolio.
The guidelines specifically ban project-based loans from using bullet repayments, insisting instead that such loans must be serviced through regular cash flow over the project’s life.
Loans exceeding 12 months in duration may only adopt a bullet repayment structure if they are fully backed by cash or a sinking fund that matures before or at the loan’s maturity date. Banks are also barred from converting standard loans into bullet repayment arrangements unless that was the original structure agreed upon.
The CBN stated that these measures are intended to strengthen credit risk management, foster accountability, and restore confidence in Nigeria’s banking sector.
