CBN Reaffirms Banking Sector Stability amid Transitional Measures

The Central Bank of Nigeria (CBN) has emphasised the robust health of the country’s banking sector whilst announcing routine transitional measures affecting a select number of financial institutions nearing the end of temporary regulatory relief.

The measures form part of the CBN’s systematic approach to implementing the recapitalisation programme unveiled in 2023, designed to support Nigeria’s long-term economic growth objectives.

The affected banks are completing their exit from regulatory forbearance measures initially introduced to mitigate the financial impact of the coronavirus pandemic.

According to a statement from Hakama Ali, acting Director of Corporate Communications, this development represents a natural progression in the sector’s recovery.

“These institutions are in the final stages of exiting temporary regulatory forbearance,” Ali confirmed, highlighting that the transition has been carefully managed to ensure minimal disruption.

Recapitalisation Progress Exceeds Expectations

The 2023 recapitalisation programme has already generated substantial capital inflows and strengthened balance sheets across Nigeria’s banking sector.

Most institutions have either fulfilled the new capital requirements or are well-positioned to meet them ahead of the 31st March 2026 deadline.

The programme has attracted significant investor interest, with many banks reporting enhanced financial positions as a result of the initiative.

Temporary Restrictions Implemented

According to the apex bank, the transitional measures include temporary limitations on capital distributions, including dividends and bonus payments, to preserve internally generated funds and strengthen capital adequacy ratios.

These restrictions, it added, apply exclusively to the limited number of banks still completing their transition.

All affected institutions have received formal notification and remain under enhanced supervisory oversight to ensure smooth compliance with the new framework.

International Best Practice Alignment

Meanwhile, the CBN has granted limited, time-bound flexibility within its capital framework, consistent with international regulatory standards.

Nigeria’s Risk-Based Capital requirements exceed global Basel III minimum standards, maintaining the country’s reputation for stringent financial oversight.

Similar transitional arrangements have been implemented by regulators in the United States, Europe, and other major financial centres as part of post-crisis reform programmes, demonstrating the conventional nature of such measures.

Stakeholder Engagement Continues

The central bank has committed to maintaining transparent communication with industry stakeholders throughout the transition period. Regular engagement will continue through established channels including the Bankers’ Committee and the Body of Bank CEOs.

“The goal is to ensure a transparent, predictable, and collaborative regulatory environment,” the CBN stated, emphasising its commitment to orderly implementation of ongoing reforms.

Sector Outlook Remains Positive

CBN officials stressed that the measures represent neither unusual circumstances nor cause for concern, but rather the continuation of deliberate reform implementation already underway.

The central bank has pledged to take all necessary actions to preserve sector stability and foster a resilient financial ecosystem capable of supporting sustainable economic growth.

The Nigerian banking sector’s overall strength and stability remain intact, with the transitional measures serving as a final step in the systematic implementation of post-pandemic recovery strategies.