The Central Bank of Nigeria, CBN, has directed Nigerian banks under regulatory forbearance to put on hold dividend payments and bonuses to foreign subsidiaries and ventures.
The apex bank issued the directive in a circular issued on Friday by the director of banking supervision, Olubukola Akinwunmi.
Regulatory forbearance is a temporary suspension or relaxation of certain regulations by a government or regulatory body during times of economic hardship or crisis.
CBN explained that the move is part of a broader instrument to reinforce capital buffers, improve balance sheet resilience, and ensure prudent capital retention within the Nigerian banking sector.
“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.
“This supervisory measure is intended to ensure that internal resources are retained to meet existing and future obligations and to support the orderly restoration of sound prudential positions,” the circular reads.
The regulator also directed the affected banks to halt new investments in foreign subsidiaries or offshore ventures.
According to the circular, the move targets lenders benefiting from forbearance on credit exposures and single obligor limits (SOL) — part of a broader transitional arrangement by the CBN to stabilise the banking industry following macroeconomic shocks and sector-wide restructuring.
“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 circular reads.
“This supervisory measure is intended to ensure that internal resources are retained to meet existing and future obligations and to support the orderly restoration of sound prudential positions.”
The CBN said it would continue to monitor compliance and work closely with affected institutions.
The development comes as Nigerian banks ramp up efforts to achieve the CBN recapitalization deadline by 2026.
Recall that in April 2022, the CBN extended interest rate forbearance on loans by twelve months, while in September 2023, it prohibited banks from using gains from foreign exchange revaluation for dividends or other capital expenditures
