The Central Bank of Nigeria (CBN) has issued a fresh directive, instructing banks currently operating under regulatory forbearance to suspend the payment of dividends to shareholders as well as bonuses to directors and senior management.
The directive, conveyed through a circular dated June 13, forms part of the apex bank’s ongoing efforts to strengthen the financial stability of affected banks as Nigeria’s banking sector undergoes a crucial transition.
According to the CBN, the suspension will enable these institutions to build up capital buffers, enhance operational resilience, and retain sufficient internal funds to meet their financial obligations in the short and medium term.
Regulatory forbearance is a temporary relief framework granted to banks, allowing them flexibility in meeting certain prudential guidelines, including credit exposure limits and single obligor requirements, typically during periods of financial strain or systemic reforms.
In addition to halting dividends and bonuses, the CBN warned that no new investments should be made by these banks in foreign subsidiaries or offshore ventures while the forbearance regime remains in effect.
The apex bank clarified that these restrictions would stay in place until the affected banks successfully exit the forbearance phase and their financial health is independently verified to meet current regulatory standards.
This latest directive is one of several measures rolled out by the CBN in recent months to tighten oversight of the financial services sector, following widespread reforms and an ambitious recapitalisation programme targeting improved governance, capital adequacy, and operational soundness in Nigeria’s banking industry.
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