CBN Orders Banks to Submit Capital Restoration Plans as Forbearance Regime Winds Down
The Central Bank of Nigeria (CBN) has mandated all affected banks to submit detailed capital restoration plans as part of efforts to exit the ongoing regulatory forbearance regime. This directive was announced in a circular signed by the Director of Banking Supervision, Olubukola Akinwunmi, and made public via the CBN’s website. The apex bank emphasized that these plans are intended to strengthen regulatory compliance and ensure that banks maintain robust capital positions moving forward.
According to the CBN, the capital restoration plans are to be submitted within ten working days after the end of each quarter, starting from June 30, 2025. The plans must outline the management’s strategies for achieving full regulatory compliance, including cost-cutting initiatives, reduction of risk assets, and necessary changes to business models. The objective is to address and correct capital adequacy issues and restore asset quality indicators over a defined period.
In addition to the restoration plans, the CBN has ended key regulatory waivers that were part of the forbearance regime. These include the termination of Single Obligor Limits waivers, the suspension of dividend and bonus payments, and restrictions on investments in foreign subsidiaries. These moves are designed to reinforce financial discipline and prudent banking practices within the sector.
Banks are also now required to provide enhanced quarterly disclosures on several critical financial metrics. These include detailed provisioning statuses, capital adequacy ratio (CAR) calculations both with and without transitional reliefs, data on restructured loans, and full disclosure of Additional Tier 1 (AT1) instruments, such as their terms and usage. These disclosures are meant to improve transparency and strengthen the CBN’s supervisory oversight.
The CBN described the new policy measures as both “firm and supportive,” aimed at ensuring a smooth exit from the forbearance regime while upholding macro-financial stability. The regulatory body reaffirmed its commitment to responsible banking and high operational standards, signaling a renewed focus on long-term sector stability and resilience.
Source: Punch