The Central Bank of Nigeria (CBN) has mandated commercial banks in the country to develop and submit a capital restoration plan. This directive is part of the CBN’s regulatory efforts to facilitate the transition away from the forbearance regime.
Olubukola Akinwunmi, the CBN’s Director of Banking Supervision, announced this requirement in a circular released on the bank’s website on Monday. The CBN stated that the Capital Restoration Plan will work in conjunction with other measures, including the termination of forbearance exposure, waivers on Single Obligor Limits, and the suspension of dividend payments, bonuses, and investments in foreign subsidiaries for the affected banks.
The CBN emphasized, “To support these measures and ensure proactive capital planning, all affected banks must prepare and submit a comprehensive Capital Restoration Plan to the CBN by the 10th working day following the end of each quarter, starting from June 30, 2025. The plan should outline management’s strategies for achieving full regulatory compliance, which may include cost optimization initiatives, risk asset reduction, significant risk transfers, and necessary adjustments to the business model.
The plan must encompass the entire duration until capital and asset quality indicators are fully normalized. Effective June 30, 2025, banks are required to disclose detailed provisioning statuses and reconciliations of affected credit exposures, as well as Capital Adequacy Ratio (CAR) calculations with and without transitional reliefs. Additionally, they must provide classification migration data for restructured or impacted loan facilities and comprehensive disclosures of Additional Tier 1 (AT1) instruments, including issuance terms, usage, and related conditions.”
The CBN noted that these measures “constitute a firm yet supportive framework for the final phase of exiting the regulatory forbearance regime, reflecting the CBN’s strong focus on macro-financial stability, responsible banking practices, and standards.”
It is worth mentioning that on June 14, 2025, the CBN instructed banks under regulatory forbearance to suspend dividend payments and bonuses to foreign subsidiaries and ventures. This announcement caused concern within the financial sector; however, the CBN has reassured stakeholders of the sector’s stability.
A report from Renaissance Capital in June indicated that Zenith Bank, First Bank, Access Bank, Fidelity Bank, and FCMB have significant forbearance exposures and are among the five Nigerian banks currently under CBN regulatory forbearance.
