Ajibola Olarinoye
The Central Bank of Nigeria (CBN) has instructed banks operating under regulatory forbearance to suspend dividend payments and bonuses to their foreign subsidiaries and ventures.
This directive was communicated in a circular released on Friday by Olubukola Akinwunmi, the director of banking supervision at the CBN.
The CBN stated that this action is part of a broader strategy to strengthen capital buffers, enhance balance sheet resilience, and ensure responsible capital retention within the Nigerian banking sector.
“This temporary suspension will remain in effect until the regulatory forbearance is fully lifted and the banks’ capital adequacy and provisioning levels are independently verified to comply with current standards.
The circular states, “This supervisory measure aims to ensure that internal resources are preserved to fulfill current and future obligations, as well as to facilitate the orderly restoration of sound prudential positions.”
This announcement coincides with Nigerian banks intensifying their efforts to meet the Central Bank of Nigeria’s recapitalization deadline set for 2026.
It is worth noting that in April 2022, the Central Bank extended the interest rate forbearance on loans for an additional twelve months. Furthermore, in September 2023, it prohibited banks from utilizing profits from foreign exchange revaluation for dividends or other capital expenditures.
