The Central Bank of Nigeria (CBN) has directed banks to submit detailed capital restoration plans as part of its phased exit from pandemic-era regulatory forbearance measures.
In a circular issued Monday by the Director of Banking Supervision, Olubukola Akinwunmi, the apex bank set a deadline of 10 working days after each quarter—starting June 30, 2025—for lenders to file their compliance strategies.
The directive follows earlier measures including the termination of forbearance exposures, withdrawal of Single Obligor Limit waivers, and restrictions on dividend payments, bonuses, and foreign subsidiary investments for affected banks. The CBN emphasized that the restoration plans must outline concrete steps to achieve full regulatory compliance, covering cost optimization, risk asset reduction, risk transfers, and potential business model adjustments.
Banks are also required to submit quarterly disclosures on key financial metrics, including provisioning status, Capital Adequacy Ratio (CAR) calculations with and without transitional reliefs, loan classification movements, and details on Additional Tier 1 (AT1) instruments. The CBN stated that submitted plans will undergo regulatory review and serve as benchmarks for ongoing supervisory monitoring.
“The measures reflect a firm but supportive framework for the final phase of exiting the forbearance regime,” the circular noted, underscoring the CBN’s commitment to macro-financial stability and strengthened banking standards. The move signals the regulator’s push to ensure lenders proactively address capital shortfalls and asset quality risks as Nigeria’s economy continues to recover from pandemic-induced disruptions.
Analysts say the directive could pressure undercapitalized banks to accelerate balance sheet repairs, with potential implications for credit growth and sector consolidation. The CBN’s forbearance exit aligns with global central banks’ post-crisis normalization efforts, though local lenders face unique challenges from Nigeria’s high inflation and currency volatility.
No immediate reactions were reported from Nigerian banks, but industry sources expect intensified engagement between lenders and regulators in the coming quarters. The June 2025 deadline marks a critical milestone in the CBN’s multi-year effort to restore pre-pandemic prudential norms without destabilizing the financial system.