CBN Moves to Strengthen Bank Oversight After N4.65tn Recapitalisation

The Central Bank of Nigeria has announced plans for continued regulatory oversight of banks following the completion of the financial sector’s recapitalisation programme. The apex bank said greater attention would be placed on areas including corporate governance, asset quality, liquidity and large exposures as it continues to monitor the banking sector. The CBN disclosed that 33 banks met the revised minimum capital requirements at the end of the two-year recapitalisation exercise, with the banks collectively raising N4.65 trillion. The recapitalisation programme was introduced in March 2024 as part of efforts to strengthen the financial system and improve the capacity of banks to support economic growth. Speaking at a finance-related event in Abuja, CBN Deputy Governor Muhammad Sani Abdullahi said stronger capital must be accompanied by sound governance and effective risk management. The apex bank stressed that having more capital alone would not guarantee a stable banking system. It said banks would also need to maintain effective internal controls and ensure that lending decisions are based on viable projects and sound financial considerations. The CBN is also expected to continue using risk-based supervision, stress testing and macroprudential monitoring to identify potential risks within the financial system. The regulator highlighted the importance of protecting customers’ data and maintaining reliable payment systems as Nigeria’s financial sector continues to expand. According to the apex bank, well-capitalised financial institutions should be better positioned to support infrastructure financing, industrial development and international trade. The latest move marks a shift in focus from the recapitalisation exercise itself to ensuring that banks maintain sound operations after meeting the new capital requirements. The CBN is expected to continue monitoring the industry as Nigerian banks adjust to the post-recapitalisation environment.