In a decisive move to transition Nigerian banks out of the regulatory forbearance regime, the Central Bank of Nigeria (CBN) has mandated all affected financial institutions to submit comprehensive capital restoration plans. This directive, issued through a circular signed by the Director of Banking Supervision, Olubukola Akinwunmi, was published on the apex bank’s website on Monday.
The CBN stated that the new requirement forms part of its broader regulatory measures aimed at reinforcing financial sector stability, ensuring forward-looking capital planning, and restoring full compliance with prudential standards. Affected banks are expected to submit their capital restoration plans no later than the 10th working day following the end of each quarter, starting from June 30, 2025.
According to the CBN, “The plan should detail the management’s proposed strategies to restore full regulatory compliance, including (but not limited to) cost optimisation initiatives, risk asset reduction, significant risk transfers, and necessary business model adaptations.”
The restoration plan must span the entire period until full normalisation of capital and asset quality indicators is achieved. Submissions will undergo rigorous regulatory review and serve as a basis for ongoing supervisory monitoring throughout the transition process.
The central bank also outlined other sweeping measures to accompany the exit strategy, including the termination of forbearance exposures, suspension of dividend and bonus payments, restrictions on investments in foreign subsidiaries, and withdrawal of waivers related to Single Obligor Limits.
In addition, banks will now be required to disclose key financial metrics quarterly. These include detailed provisioning status and reconciliations of affected credit exposures, Capital Adequacy Ratio (CAR) calculations with and without transitional reliefs, classification migration data for restructured loans, and full disclosures on Additional Tier 1 (AT1) instruments, including issuance terms and usage conditions.
“These measures represent a firm but supportive framework for the final phase of exiting the regulatory forbearance regime,” the CBN stated. “They reflect the apex bank’s steadfast focus on macro-financial stability, responsible banking practices, and robust supervisory standards.”
This marks a critical shift in Nigeria’s post-pandemic financial landscape, as the central bank signals a return to strict regulatory oversight and sustainable banking practices.