Bank customers have been cautioned by the Central Bank of Nigeria (CBN) not to use foreign cash as collateral for Naira loans.
The warning was issued in a statement on Monday in Abuja by Adetona Adedeji, the acting director of the CBN’s Banking Supervision Department.
According to Adedeji, the practice of utilizing collateral denominated in foreign currencies for Naira loans would only be permitted in the event that the Federal Government issues Eurobonds.
He declared that foreign bank guarantees, such as standby letters of credit, would also be accepted.
“In this regard, all loans currently secured with dollar-denominated collaterals other than as mentioned above should be wound down within 90 days. Naira Slides as Nigerians Import Appetite Rises
“Failing which such exposures shall be risk-weighted 150 per cent for Capital Adequacy Ratio computation in addition to other regulatory sanctions,” he said.
