All Nigerian banks have received a letter from the Central Bank of Nigeria asking them to cease using foreign currency as security for naira loans.
This was revealed in a circular that was posted on its website on Monday.
The top bank stated that it has seen FCY being used as collateral for naira loans by its clients and, as a result, it forbids it going forward.
In a letter addressed to all banks released on the April 8 2024, the CBN highlighted its observation of the practice where bank customers utilize Foreign Currency (FCY) as collateral for Naira loans. In response to this, the CBN has announced the prohibition of this practice, with exceptions outlined for specific types of foreign currency collaterals. [CONTINUE READING HERE]
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