The Central Bank of Nigeria, CBN, has directed Nigerian banks under regulatory forbearance to put on hold dividend payments and bonuses to foreign subsidiaries and ventures.

The apex bank issued the directive in a circular issued on Friday by the director of banking supervision, Olubukola Akinwunmi.

CBN explained that the move is part of a broader instrument to reinforce capital buffers, improve balance sheet resilience, and ensure prudent capital retention within the Nigerian banking sector.

“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 reads.

The development comes as Nigerian banks ramp up efforts to achieve the CBN recapitalization deadline by 2026.

Recall that in April 2022, the CBN extended interest rate forbearance on loans by twelve months, while in September 2023, it prohibited banks from using gains from foreign exchange revaluation for dividends or other capital expenditures.