CBN DIRECTS BANKS TO SUBMIT CAPITAL RESTORATION PLANS AS FORBEARANCE REGIME ENDS
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By: Sefiu Ajape
As part of its regulatory measures to facilitate the transition out of the forbearance regime, the Central Bank of Nigeria (CBN) has instructed banks to submit a Capital Restoration Plan.
This directive was outlined in a circular signed by Olubukola Akinwunmi, the CBN’s Director of Banking Supervision, and published on the apex bank’s website on Monday.
According to the circular, the Capital Restoration Plan is designed to complement other actions, including the termination of forbearance exposures and waivers on Single Obligor Limits, as well as the suspension of dividend payments, bonuses, and investments in foreign subsidiaries by affected banks.
CBN said, “To complement the above measures and ensure forward-looking capital planning, all affected banks are required to prepare and submit a comprehensive Capital Restoration Plan to the CBN on or before the 10th working day, following the end of the quarter with effect from June 30, 2025.
“The plan should detail the management’s proposed strategies to restore full regulatory compliance, including (but not limited to) cost optimisation initiatives, risk asset reduction, significant risk transfers, and necessary business model adaptations.
“The plan must cover the entire period until full normalisation of capital and asset quality indicators is achieved.
“Plans submitted will be subject to regulatory review and approval, and will form the basis for continuous supervisory monitoring and engagement throughout the transition.
The apex bank also said lenders are required to submit quarterly disclosures on key metrics, which will aid regulatory transparency and support supervisory oversight.
Effective June 30, 2025, banks are to disclose “Detailed provisioning status and reconciliation of affected credit exposures. CAR calculations with and without transitional reliefs. Classification migration data for restructured or impacted loan facilities and comprehensive disclosure of AT1 instruments, including issuance terms, usage, and related conditions.”
The measures “represent a firm but supportive framework for the final phase of exiting the regulatory forbearance regime, and reflect the CBN’s feat focus on macro-financial stability, responsible banking practices, and standards,” the CBN added.
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