Central Bank of Nigeria (CBN) has directed all deposit money banks (DMB) that are under regulatory forbearance to suspend dividend payments, defer bonuses for directors, as well as halt investments in foreign subsidiaries or offshore ventures.

According to the CBN, the directive seeks to strengthen capital buffers and promote prudent capital retention across the sector, adding that the suspension will remain until the apex bank can independently verify the capital adequacy of the banks.

Regulatory forbearance is a temporary reduction or postponement of payments, such as for loans or mortgages, usually introduced to give temporary relief to individuals, and corporations, including financial institutions encumbered by financial straits.

The CBN, in a circular on Friday signed by the Director of Banking Supervision, Olubukola Akinwunmi, stated that the fresh move targets lenders benefiting from forbearance on credit exposures and single obligor limits (SOL), which is part of a broader transitional arrangement by the apex bank to stabilise the banking industry following macroeconomic shocks and sector-wide restructuring.

“This temporary suspension is until such a time as the regulatory forbearance is fully exited and the banks’ capital adequacy and provisioning levels are independently verified to be fully compliant with prevailing standards.

“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.