IN a bold move to shore up the resilience of Nigeria’s banking sector, the Central Bank of Nigeria, CBN has ordered a temporary freeze on dividend payments, executive bonuses, and foreign investments by banks currently operating under regulatory forbearance.
The directive which takes effect immediately was issued through a formal letter from the Banking Supervision Department and signed by Dr. Olubukola A. Akinwunmi, Director of Banking Supervision relates to banks that have received special regulatory relief related to capital adequacy and exposure limits.
According to the circular, the affected banks must:
Suspend all dividend payments to shareholders;
Defer bonuses to directors and senior management; and
Halt new investments in foreign subsidiaries or offshore ventures.
The CBN also said that the temporary suspension will remain in effect until the concerned banks exit the forbearance regime and demonstrate full compliance with capital adequacy and provisioning standards, as confirmed by independent verification.
“This supervisory measure is intended to ensure that internal resources are retained to meet existing and future obligations and to support the orderly restoration of sound prudential positions,” the circular stated.
The move by the bank is part of a broader strategy to strengthen capital buffers and promote prudent financial practices in the face of ongoing economic uncertainty and the fragile balance sheets of some institutions.
The CBN emphasized that it will continue to monitor the evolving situation and engage with affected institutions to ensure compliance and support systemic stability.
Daily Tracker reports that although the directive is a necessary cautionary step in safeguarding the financial system, it may draw criticism from shareholders and executives anticipating end-of-year returns.
However, the Nigerian economy has been facing headwinds, including currency volatility and tightening global financial conditions.
