The Central Bank of Nigeria, CBN, has ordered commercial banks in the country to stop giving out loans in foreign currencies to customers who don’t have earnings in foreign currencies.
This was stated by the Director of Banking Supervision at the apex bank, Mrs. Tokunbo Martins.
She said the policy shift followed the continuous depreciation of the naira and subsequent rise in foreign currency exposures of banks in naira terms.
She said the currency depreciation, which intensified following the introduction of the flexible exchange regime, had increased the loan repayment obligation of borrowers and threatened their capacities to meet contracted loan repayments.
“Banks may, therefore, need to restrict extending foreign currency denominated loans to customers that do not earn foreign exchange,” she said.
She spoke on Tuesday at the CBN-Financial Institutions Training Centre (FITC) continuous education programme for Directors of Banks and Other Financial Institutions, held in Lagos.