The Central Bank of Nigeria (CBN) has prohibited the use of foreign currency (FCY) as collateral for Naira loans, a significant shift in its approach to loan collateralization.
In a directive by the Acting Director of the Banking Supervision Department, Adetona Adedeji, banks can no longer accept deposits denominated in foreign currencies like USD, EUR, or GBP as security for loans issued in Naira.
The CBN said it had observed the use of foreign currencies by bank customers as collateral for naira loans and prohibits it with immediate effect.
Earlier, the apex bank sold a total of $10, 000 at the rate of N110/$1 to 1, 588 Bureau De Change (BDC) operators to meet retail market demand for eligible invisible transactions.
In a statement today the apex bank said the BDCs are to sell to eligible customers at a spread of not more than 1.5 per cent above the purchase price, with payment of the naira deposits into four CBN accounts, starting from April 8, 2024.
