The Central Bank of Nigeria (CBN) has banned the use of foreign currency-denominated collaterals for naira loans. 

This was contained in a circular directed to all banks by CBN’s Acting Director of Banking Supervision Department, ADETONA ADEDEJI.

The apex bank official listed two exceptions to the rule as foreign currency collateral which are Eurobonds issued by the Federal Government or guarantees of foreign banks, including Standby Letters of Credit.

It, therefore, directed banks to trim all existing loans with foreign currency collaterals to 90 days or attract a 150 per cent capital adequacy ratio computation as part of the bank’s risk.