CBN signals tougher oversight as post-recapitalisation era demands stricter compliance and stronger leadership…..
Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has issued a firm warning to bank directors and financial sector leaders, urging them to strengthen corporate governance or risk decisive regulatory action.
Speaking at the Chartered Institute of Directors (CIoD) induction ceremony in Lagos, Cardoso stressed that strong governance remains critical to maintaining trust and stability within Nigeria’s financial system.
Represented by the CBN’s Director of Banking Supervision, Dr. Olubukola Akinwunmi, the governor noted that the success of the country’s recently concluded bank recapitalisation exercise would depend heavily on the quality of leadership and oversight provided by directors.
He described the recapitalisation programme as a landmark reform aimed at boosting resilience, improving investor confidence, and positioning banks to support long-term economic growth. However, he cautioned that increased capital alone would not guarantee stability.
“As we move into this new phase, the responsibility of directors becomes even more critical,” he said, emphasizing the need for stronger stewardship focused on consolidation, confidence, and financial system stability.
Cardoso warned that past failures in corporate governance have repeatedly exposed the banking sector to risks, making it clear that the apex bank would not hesitate to intervene where necessary.
He referenced recent regulatory actions, including the dissolution of boards and management of three banks in January 2024 due to serious governance lapses and breaches, noting that such measures reflect the CBN’s zero-tolerance stance.
The governor also signaled a shift toward stricter regulatory expectations, calling for directors to take on more active and strategic roles rather than serving as passive overseers.
“This is a new era that demands leadership capable of balancing profitability with sustainability, while ensuring full compliance without stifling innovation,” he said.
Cardoso further highlighted the introduction of Risk-Based Capital Requirements as a major policy shift, explaining that capital adequacy will now be assessed not just by size, but by how well it aligns with institutional risk profiles.
Under the new framework, directors are expected to strengthen oversight across credit, market, and operational risks, while ensuring proactive capital planning that anticipates emerging challenges.
He also made it clear that regulatory leniency is no longer an option, stating that the era of forbearance has come to an end.
According to him, banks must now fully comply with capital adequacy standards and maintain sufficient buffers to withstand financial shocks.
“These measures are not designed to punish institutions,” he added, “but to empower directors with the discipline and foresight needed to build stronger, more resilient financial institutions.”
The warning underscores the CBN’s commitment to tightening oversight as Nigeria’s banking sector transitions into a more demanding regulatory environment shaped by reforms and evolving economic realities.
