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The Central Bank of Nigeria, CBN, has prohibited the use of Foreign Currency-denominated collaterals for Naira loans by all Nigerian banks.<\/p>\n

The apex bank disclosed this on Monday in a letter to all commercial banks signed by its Director Banking Supervision Department, Adetona Adedeji.<\/p>\n

However, the new guidelines gave exception to Eurobonds issued by the Federal Government of Nigeria and Guarantees of foreign banks, including Standby Letters of Credit.<\/p>\n

\u201cThe Central Bank of Nigeria has observed the prevailing situation where bank customers use Foreign Currency (FCY) as collaterals for Naira loans.<\/p>\n

\u201cConsequently, the current practice of using foreign currency-denominated
\ncollaterals for Naira loans is hereby prohibited, except, where the foreign currency collateral is: Eurobonds issued by the Federal Government of Nigeria; or Guarantees of foreign banks, including Standby Letters of Credit.<\/p>\n

\u201cIn this regard, all loans currently secured with dollar-denominated collaterals other than as mentioned above should be wound down within 90 days, failing which such
\nexposures shall be risk-weighted 150 per cent for Capital Adequacy Ratio computation, in addition to other regulatory sanctions,\u201d CBN stated.<\/p>\n

The development comes in the wake of the recently announced minimum capital requirements for all banks.<\/p>\n

For months, CBN\u2019s governor, Olayemi Cardoso had continued to roll out policies to defend the Naira and Nigeria\u2019s economy.<\/p>\n

CBN stops foreign currency-denominated collaterals for Naira loans<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Central Bank of Nigeria, CBN, has prohibited the use of Foreign Currency-denominated collaterals for Naira loans by all Nigerian…<\/p>\n","protected":false},"author":1,"featured_media":26180,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4161,4274,939,15,761],"tags":[519,63,764,943,180,762],"class_list":["post-26179","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-cbn","category-naira","category-news","category-top-headlines","tag-business","tag-cbn","tag-headlines","tag-naira","tag-news","tag-top"],"yoast_head":"\n