The Central Bank of Nigeria (CBN) has issued a directive mandating commercial banks to submit detailed Capital Restoration Plans, as part of new regulatory measures to wind down the long-standing forbearance regime.
This requirement, outlined in a circular signed by the Director of Banking Supervision at the CBN Olubukola Akinwunmi, was published on the regulator’s website on Monday. It signals a shift toward stricter compliance and improved risk management across Nigeria’s banking sector.
According to the CBN, affected financial institutions must deliver a comprehensive strategy for restoring their capital and asset quality to full regulatory standards. The plan must be submitted no later than the 10th working day after the end of each quarter, beginning with the quarter ending June 30, 2025.
The regulator emphasized that the restoration blueprint must cover a wide range of corrective measures. These include cost-cutting strategies, reduction of risk-weighted assets, significant offloading of credit risk, and potential changes to business models. The plan is expected to remain in force until the bank achieves full compliance with capital adequacy and asset quality benchmarks.
In addition to the capital restoration requirement, the CBN is implementing several enforcement actions. These include the cancellation of regulatory forbearance privileges, withdrawal of previously granted waivers on Single Obligor Limits, and a freeze on the payment of dividends and bonuses. Furthermore, affected banks are barred from making new investments in foreign subsidiaries during the transition period.
“The measures aim to provide a clear and supportive structure as banks move toward exiting the forbearance window,” the CBN stated. “This reflects our continued focus on macro-financial stability and the promotion of responsible banking practices.”
The CBN also announced enhanced reporting obligations, which will come into effect from June 30, 2025. Under the new rules, banks must submit quarterly updates detailing their credit provisioning status, reconciliations of affected exposures, and capital adequacy calculations—both with and without transitional regulatory reliefs.
Additionally, banks will be required to disclose data on the reclassification of restructured loans and provide full transparency regarding their Additional Tier 1 (AT1) instruments. This includes issuing terms, use of proceeds, and any attached conditions.
All submitted capital restoration plans will be reviewed by the apex bank and used as a foundation for continuous regulatory engagement and oversight during the transition period.
