Regulatory Forbearance Directive Only for Limited Banks—CBN

By Adedapo Adesanya

The Central Bank of Nigeria (CBN) has clarified that the recent moves regarding regulatory forbearance is limited to limited banks.

A few days ago, the CBN issued a directive to banks in the country, particularly those in possible distress, prohibiting them from paying dividends to shareholders and issuing bonuses to directors.

This development led to the banking index recording losses over the last two days at the Nigerian Exchange (NGX) Limited.

In a statement on Wednesday, the central bank affirmed the strength of the Nigerian banking sector, noting that it issued routine transitional guidance for select institutions.

In the new circular, the apex bank clarified that it introduced time-bound measures for a small number of banks still completing their transition from the temporary regulatory support provided, mostly in response to the economic impact of the COVID-19 pandemic.

“This step is part of the CBN’s broader, sequenced strategy to implement the recapitalisation programme announced in 2023. The programme, designed to align with Nigeria’s long-term growth ambitions, has already led to significant capital inflows and balance sheet strengthening across the sector,” said the statement signed by Mrs Hakama Sidi Ali, the acting Director of Corporate Communications at CBN.

The CBN also noted that most banks have either completed or are on track to meet the new capital requirements well before the final implementation deadline of March 31, 2026.

“The measures announced apply only to a limited number of banks. These include temporary restrictions on capital distributions, such as dividends and bonuses, to support retention of internally generated funds and bolster capital adequacy. All affected banks have been formally notified and remain under close supervisory engagement,” it added.

The apex bank said to support a smooth transition, it has allowed limited, time-bound flexibility within the capital framework, consistent with international regulatory norms, adding that Nigeria generally maintains Risk-Based Capital requirements that are significantly more stringent than the global Basel III minimums.

“These adjustments reflect a well-established supervisory process consistent with global norms. Regulators in the U.S., Europe, and other major markets have implemented similar transitional measures as part of post-crisis reform efforts.”

“Nigeria’s banking sector remains fundamentally strong. These measures are neither unusual nor cause for concern; they are a continuation of the orderly and deliberate implementation of reforms already underway.

“The CBN will continue to take all necessary actions to safeguard the sector’s stability and ensure a robust, resilient financial ecosystem that supports sustainable economic growth,” parts of the statement affirmed.