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CBN prohibits use of foreign currencies as loan collateral

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CBN prohibits use of foreign currencies as loan collateral

The Central Bank of Nigeria (CBN) has directed all banks in Nigeria to stop using foreign currencies as collateral for naira loans.

The apex bank disclosed this in a circular uploaded to its website on Monday.

CBN said it had observed the use of FCY by bank customers as collateral for naira loans and, therefore, prohibits it with immediate effect.

READ ALSO: CBN revokes operating licenses of 4,173 BDCs

The apex bank has vowed to clamp down on those sabotaging government’s efforts towards stabilising Nigeria’s local currency.

Of recent, the bank, with the help of other security agencies in the country, clamped down on currency hoarders and speculators whose activities affect the appreciation of naira against the US dollar.

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