CBN asks Nigerian banks for capital restoration plan to exit forbearance regime

The Central Bank of Nigeria (CBN) has directed banks to submit a comprehensive Capital Restoration Plan (CRP) as part of its efforts to strengthen the banking sector and support the exit from the forbearance regime. In a circular signed by Dr. Olubukola Akinniyi, Director of Banking Supervision, and published on the CBN’s website, the apex bank outlined the requirements for the CRP. The CBN’s directive is aimed at ensuring that banks restore full regulatory compliance and maintain financial stability. The CRP should detail the management’s proposed strategies to achieve this goal, including cost optimization initiatives, risk asset reduction, significant risk transfers, and necessary business model adaptations. Banks are expected to submit their CRPs to the CBN within 10 working days following the end of each quarter, effective from June 30, 2025.
This move is part of the CBN’s broader regulatory efforts to enhance the stability and resilience of the banking sector. The apex bank has also terminated forbearance exposure and Single Obligor Limits waivers, suspended payment of dividends, bonuses, and investments in foreign subsidiaries for affected banks. Additionally, banks are required to submit quarterly disclosures on key metrics, which will aid regulatory transparency and support supervisory oversight. The CBN’s directive is a significant step towards strengthening the banking sector and promoting financial stability in Nigeria.
By requiring banks to submit CRPs and disclose key metrics, the apex bank aims to ensure that lenders maintain adequate capital buffers and manage risks effectively. This move is expected to enhance confidence in the banking sector and promote a more stable financial system. The deadline for submission of the CRPs is set for 10 working days after the end of each quarter, starting from June 30, 2025. The CBN’s regulatory efforts are designed to promote a more robust and resilient banking sector, and banks are expected to comply with the directive to avoid any regulatory sanctions.