2004-07-19 | TED-AD-88-2004

Large Exposures and Connected Lending

This Central Bank of Nigeria circular reminds banks to adhere to international standards for Large Exposure Limits and Connected Lending. It introduces new limits: a large exposure is any credit at least 10% of the bank's shareholders funds; aggregate large exposures should not exceed eight times the unimpaired shareholders funds. Significant shareholdings, directors, and insiders cannot borrow over 10%, 10%, and 60% respectively of the bank's paid-up capital without prior CBN approval. Infractions are punishable with fines up to N5,000 per day for 90 days, and any excess facilities must be regularized within a year.

Nigeria

Central Bank of Nigeria

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