The Central Bank of Nigeria (CBN) has emphasized the need for banks to implement tighter risk management, sound governance, and responsible lending in the post-recapitalisation era. According to CBN Deputy Governor, Corporate Services Department, Dr. Muhammad Sani Abdullahi, the banking industry, now with stronger balance sheets, must prioritize resilience to ensure stability. This was stated at the opening of the CBN's 38th Annual Seminar for Finance Correspondents and Business Editors in Abuja.
The seminar, themed "Towards a Robust and Resilient Financial System in the Post-Banking Sector Recapitalisation Era," aimed to discuss the way forward for the banking sector. Dr. Abdullahi noted that the CBN would continue to deepen its risk-based supervisory approach, macroprudential surveillance, and stress testing to safeguard the stability of the financial system. This move is expected to ensure that banks operate in a manner that promotes financial stability.
CBN's Director, Banking Supervision Department, Dr. Olubukola Akinwunmi, stressed that in the post-recapitalisation era, banks must follow the rules and prioritize sound risk controls. Akinwunmi made it clear that profit-chasing would not excuse cutting corners, as enforcement tightens to keep the financial system strong. He emphasized that stronger capital buffers would be meaningless if banks continue to take excessive risks.
The CBN has taken steps to ensure that banks comply with prudential requirements. According to Dr. Abdullahi, the regulator would insist on strict compliance with prudential requirements, and financial sector coordination, consumer protection, fintech regulation, and support for responsible innovation would remain important. The CBN also aims to promote crisis preparedness and resolution planning to mitigate potential risks.
The recent recapitalisation programme, which was announced in March 2024, has provided the banking industry with stronger capital to support a growing economy. By the end of the two-year programme, 33 banks had met the revised minimum capital requirements and raised N4.65 trillion. This development is expected to enable banks to finance long-term infrastructure, support industrial expansion, and facilitate international trade.
Nigeria's ambition of building a $1 trillion economy by 2030 requires banks capable of mobilising and allocating capital on a much larger scale. According to Dr. Abdullahi, stronger capital buffers should enable banks to compete more effectively in regional and global markets and provide greater capacity to absorb losses during economic stress. This, in turn, will sustain investment in innovation and promote economic growth.
The CBN's emphasis on sound risk controls and responsible lending is a move to ensure that banks operate in a manner that promotes financial stability. As Dr. Abdullahi noted, preserving monetary and financial stability requires continued vigilance, and the CBN must remain forward-looking, data-driven, and responsive to developments at home and abroad.
Key points
- - CBN mandates banks to implement sound risk controls and responsible lending in post-recapitalisation era. - 33 banks met revised minimum capital requirements, raising N4.65 trillion. - Nigeria aims to build a $1 trillion economy by 2030, requiring banks to mobilise and allocate capital on a larger scale.
