Following their inability to repay their loans which were sold to the Asset Management Company of Nigeria (AMCON) by deposit money banks, the Central Bank of Nigeria (CBN) has restricted banks from lending to 113 companies and 419 directors and shareholders. The CBN said it had taken the decision because the debtors which included Zenon Petroleum, MRS Holdings Limited, Arik Air Limited, Capital Oil and Gas Limited, Aero Contractors Company, Cross River, Zamfara, Kwara states among others, had refused to pay back their loans despite the purchase of the debts at an agreed price by AMCON.

According to a circular made available on the website of the CBN, dated September 17, 2012, the restriction would apply to individuals, organisations, companies as well as principal shareholders and directors of companies where the outstanding value of loans purchased by AMCON amounted to N5 billion or above as at the day of purchase, without regard to the actual amount paid by AMCON.

The circular, which was signed by CBN's Director, Banking Supervision, Mrs. A. O. Martins, stated that "it has become necessary to stop debtors who failed to repay their loans to banks and had these loans subsequently transferred to AMCON, from further enjoying credit facilities from Deposit Money Banks (DMBs) until they fully repay agreed outstandings to AMCON."

The CBN said the restriction, came into effect from the date of the circular and shall remain "until full liquidation of agreed indebtedness to AMCON", warning that any bank that flouts the guidelines would be made to make an immediate provision of 100 per cent of total principal and interest outstanding in the account of the customer and related parties, in addition to whatever regulatory penalties the CBN may decide to impose.

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