From Victor Osula, Abuja
The Central Bank of Nigeria has directed all banks to submit a detailed Capital Restoration Plan within 10 working days after the end of each quarter, starting with the quarter ending June 30, 2025.
The directive was contained in a circular signed by the Director of Banking Supervision, Olubukola Akinwunmi, and comes as part of efforts to wind down regulatory relief measures introduced during the COVID-19 crisis.
As part of the transition, the CBN also announced the termination of all pandemic-era regulatory forbearance and waivers on Single Obligor Limits (SOL), effective June 30, 2025.
The bank said this move is to restore risk sensitivity in credit classification, provisioning, and asset quality assessments.
To aid in cleaning up bank balance sheets, the CBN has temporarily waived the rule that banks must retain fully provisioned loans for one year before writing them off.
This allows affected banks to reduce their Non-Performing Loan (NPL) ratios more quickly, as long as internal governance procedures are followed.
Additionally, regulatory caps on Additional Tier 1 (AT1) capital recognition in calculating the Capital Adequacy Ratio (CAR) have been suspended from June 30, 2025, through March 31, 2026.
However, the apex bank clarified that this measure is not a substitute for the broader recapitalisation exercise announced in March.
“In continuation of its commitment to safeguarding financial system stability and ensuring a credible and orderly exit from the regulatory forbearance regime introduced during the COVID-19 crisis, the Central Bank of Nigeria (CBN) hereby communicates a coordinated set of transitional measures,” the circular stated.
The CBN said banks are expected to submit comprehensive Capital Restoration Plans that outline strategies for restoring full compliance with regulatory requirements.
These strategies may include cost optimisation, risk asset reduction, significant risk transfers, and adjustments to business models.
“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 CBN said.
The termination of COVID-era concessions requires banks to align all affected credit exposures with existing prudential guidelines and regulatory frameworks.
With the forbearance period coming to an end, the CBN said it is taking proactive steps to maintain financial sector resilience, noting that the transitional measures will allow banks to gradually normalise operations without jeopardising their stability or regulatory standing.
