As part of its broader effort to restore financial sector discipline and unwind COVID-19-era relief measures, the Central Bank of Nigeria (CBN) has directed all banks to submit a Capital Restoration Plan (CRP) within 10 working days after the end of each financial quarter, starting with June 30, 2025.
In a circular released on the CBN’s website and signed by the Director of Banking Supervision, Dr. Olubukola Akinwunmi, the apex bank outlined new compliance requirements designed to return the banking system to full prudential and regulatory alignment. The CRPs are expected to detail how each bank plans to address any capital shortfalls and restore compliance with CBN guidelines.
According to the directive, banks must include in their plans specific strategies such as:
- Cost-reduction initiatives
- Asset quality improvement measures
- Risk transfer mechanisms
- Adjustments to long-term business models and strategy
The CBN emphasized that these steps are part of a transitional framework aimed at supporting financial institutions while phasing out the regulatory forbearance policies introduced during the COVID-19 crisis. The goal, the circular noted, is to ensure macroeconomic and financial system stability while helping banks return to sound risk management and capital adequacy.
As part of this transition, the CBN formally announced the termination of all COVID-19-era waivers and relaxations on Single Obligor Limits (SOL), effective June 30, 2025. This move, according to the circular, is intended to reintroduce risk sensitivity into credit classification, provisioning, and overall lending practices.
In a bid to aid banks with the clean-up of their balance sheets, the apex bank also temporarily waived the requirement that fully provisioned loans be retained for one year before being written off. This change is expected to accelerate the reduction of non-performing loans (NPLs) across the sector.
Furthermore, the CBN has temporarily lifted regulatory caps on the recognition of Additional Tier 1 (AT1) capital in the calculation of banks’ Capital Adequacy Ratio (CAR). This waiver will be in effect from June 30, 2025, to March 31, 2026, giving banks greater flexibility to strengthen their capital positions during the transition period.
However, the CBN made it clear that this temporary relief should not be seen as a replacement for the broader bank recapitalisation programme announced in March 2025. That initiative, still in progress, remains central to the apex bank’s long-term vision for a stronger, more resilient banking system.
This latest directive is expected to place banks under increased pressure to fine-tune their operations, bolster risk management frameworks, and ensure sustainable compliance with regulatory capital standards in the post-pandemic era.
