The Central Bank of Nigeria (CBN) has directed all commercial banks currently operating under regulatory forbearance to prepare and submit detailed Capital Restoration Plans. The directive, aimed at reinforcing the financial stability of the banking sector, marks a significant phase in the apex bank’s efforts to unwind temporary relief measures extended to struggling institutions.
In a circular signed by Olubukola Akinwunmi, Director of Banking Supervision, and published Monday on the CBN’s website, the regulator mandated affected banks to present comprehensive strategies to restore compliance with capital adequacy requirements. These plans are to be submitted no later than the 10th working day following the end of each quarter, beginning June 30, 2025.
According to the CBN, the restoration plans must outline specific management actions, including cost-cutting measures, risk asset reductions, major risk transfers, and business model adjustments. The objective, the bank said, is to ensure a full return to regulatory compliance across capital and asset quality benchmarks.
This latest directive comes alongside a series of enforcement measures introduced by the CBN, including the termination of forbearance exposures, revocation of Single Obligor Limits waivers, and the suspension of dividend payouts, bonuses, and new investments in foreign subsidiaries by the affected banks.
In addition to submitting restoration plans, banks must also provide detailed disclosures on their provisioning status, reconciliation of credit exposures, and capital adequacy ratio (CAR) calculations with and without transitional reliefs. They are further required to disclose migration data on restructured loan facilities and the terms and usage of Additional Tier 1 (AT1) capital instruments.
“These measures represent a firm but supportive framework for the final phase of exiting the regulatory forbearance regime,” the CBN stated, adding that the initiative reflects its continued commitment to macro-financial stability and responsible banking practices.
The directive follows the CBN’s June 14 instruction halting dividend and bonus payments by banks operating under regulatory relief, a move that had stirred concerns within the financial sector. However, the apex bank has maintained that the banking system remains stable and resilient.
A recent report by Renaissance Capital identified Zenith Bank, First Bank, Access Bank, Fidelity Bank, and FCMB as institutions significantly impacted by the forbearance regime, citing their high exposure levels.
The CBN’s latest directive underscores the urgency for affected banks to strengthen their financial positions as the regulator moves to normalise oversight mechanisms and ensure long-term sectoral health.