Nigeria's central bank has tightened restrictions on the flow of dollars to domestic lenders, forcing them to delay hard currency loan and trade repayments to foreign banks and increasing the risk of default, bankers say.
Now, banks seeking dollars to repay letters of credit (LCs) to foreign banks have to submit bids to the central bank, imposing extra barriers to hard currency access - to the consternation of foreign institutions.
Previously, the delays have only been for a day or two, and have not been a cause for alarm for the international lenders.
But now, repayment delays have swelled to over a week in some cases, bankers say.
"We have had delays for almost a year," one senior Nigerian banker, who asked not to be named, told Reuters. "But we have capacity to pay what we owe. The delays are understood by both parties to be due to exchange controls."
Banking sources estimate outstanding LCs at $500 million.
The central bank has rationed dollars since oil prices began to fall, selling around $250 million a week, according to bankers. This is half what it used to sell when oil prices were high, making sourcing dollars to repay matured LCs a headache.
The central bank met commercial lenders this week to assure them it would sell them foreign currency to repay foreign loans, but told them they needed to pay off matured LCs first before negotiating new ones to prevent a backlog building up, bankers said.
If the amount of delayed repayments gets too big, bankers fear it might become impossible for the central bank to meet dollar demand, which would push the situation from a liquidity crunch to a credit crunch - and ultimately even a default.
"If we have a credit default due to the currency controls, it will affect the entire country and worsen the country risk profile," another banker said.
Oil revenues have historically accounted for 70 percent of Nigerian government income and 90 percent of its foreign exchange. The oil price collapse has whacked public finances and the currency, which trades on the black market at almost half its official value.
President Muhammadu Buhari has rejected calls to devalue the naira, even though banks are being squeezed harder every day.
Loan growth ground to a halt last year after a 32.5 percent jump in 2014 as the banks' main clients in the oil sector halted projects or were unable to service loans.
"We will see non-performing loans rise to around 10 percent in 2016 moderated by restructuring and write-offs," said Akin Majekodunmi, a sub-Saharan Africa banking analyst at Moody's.
Bad loans had risen above 5 percent at the end of 2015, up from 4.7 percent as of June 2015, he estimated.