The Central Bank of Nigeria (CBN) has suspended dividend payments to shareholders and bonuses to directors and senior management staff of banks currently benefiting from regulatory forbearance.
The directive was contained in a circular dated June 13, signed by the bank’s Director of Banking Supervision, Mrs Olubukola Akinwunmi.
Regulatory forbearance refers to a situation where financial regulators temporarily relax or suspend certain regulatory requirements or enforcement actions for a bank, typically because the bank is in distress or may fail.
The regulatory forbearance arrangement, which allows banks some relief in meeting credit exposure and Single Obligor Limit (SOL) requirements, is currently being reviewed by the central bank in terms of capital positions and provisioning adequacy.
According to the CBN, the move is part of efforts to strengthen capital buffers, enhance balance sheet resilience, and promote prudent internal capital retention within the banking sector during what it described as a transitional period.
As part of this review, the CBN directed affected banks to suspend dividend payments, defer bonuses, and refrain from making investments in foreign subsidiaries or launching new offshore ventures.
“This temporary suspension is until such a time as the regulatory forbearance is fully exited and the banks’ capital adequacy and provisioning levels are independently verified to be fully compliant with prevailing standards,” the CBN said.
The bank added that the measure is to ensure that internal resources are retained to meet existing and future obligations and support “the orderly restoration of sound prudential positions.”
The CBN also said it will continue to monitor developments and engage with institutions as necessary.
The move comes amid efforts to tighten supervision across the financial system following recent banking sector reforms and recapitalisation directives.
Recall that the CBN previously restricted banks from using gains from their foreign currency revaluations for dividends and gave regulatory leniency to those breaching lending limits.
These developments come as the March 2026 banking capital base recapitalisation deadline nears and the country pursues an ambitious $1 trillion gross domestic product (GDP).