CBN ends regulatory leniency, orders Banks to submit capital restoration plans

In a decisive move to strengthen Nigeria’s banking sector and transition out of the era of regulatory forbearance, the Central Bank of Nigeria (CBN) has issued a directive mandating all affected banks to submit a Capital Restoration Plan (CRP) by mid-2025.

The plan is part of a broader strategy to reinforce capital adequacy, improve loan quality, and ensure the long-term resilience of the nation’s financial system.

The directive, announced via a circular signed by the CBN’s Director of Banking Supervision, Olubukola Akinwunmi, and published on the apex bank’s website, signals a shift from the relaxed oversight introduced during the COVID-19 crisis and subsequent economic disruptions.

According to the circular, beginning June 30, 2025, affected banks must submit a comprehensive Capital Restoration Plan to the CBN within 10 working days following the end of each quarter.

These plans will serve as blueprints for how banks intend to restore full regulatory compliance, particularly in capital adequacy and asset quality.

Over the past few years, the CBN had offered regulatory flexibility to help banks weather severe macroeconomic turbulence—including the COVID-19 pandemic, inflation surges, and the devaluation of the naira.

These leniencies allowed banks to avoid full provisioning on bad loans and temporarily bypass capital adequacy shortfalls.

But as economic conditions begin to stabilise and the apex bank sharpens its focus on macro-financial stability, the regulator says it’s time to phase out these accommodations and reinforce responsible banking practices.