Introduction
When the Central Bank of Nigeria (CBN) released its June 13, 2025 circular—“Temporary Suspension of Dividend Payments, Bonuses and Investment in Foreign Subsidiaries”—it was not the first time Nigerian banks had seen forbearance linked to strict conditions. But the circular’s lasting impact has become clearer over the months since its release, particularly following the June 20, 2025 follow-up circular that set out an explicit exit roadmap from the relief regime.
The CBN circular represents a temporary prudential measure designed to limit profit distribution and offshore expansion by banks currently operating under regulatory forbearance. By directing the suspension of dividends, bonuses, and investments in foreign subsidiaries, the Central Bank aims to preserve internal capital, bolster balance sheet resilience, and ensure that affected institutions prioritise the restoration of sound prudential positions. Ultimately, the directive seeks to strengthen credit risk management and uphold system-wide financial stability during this transitional period.
The CBN’s position is simple, if you are getting support, there are strings attached. Any relief, whether it is forbearance, a concession, or an extended credit limit, comes with increased scrutiny and a responsibility to operate with stronger governance and transparency. It reinforces the long-standing principle captured in the common law maxim “Qui sentit commodum, sentire debet et onus”, he who enjoys the benefit must also bear the burden. It is the same principle as in everyday life: if you are getting a break, you are expected to act responsibly in return. This regulatory action we believe is not a punishment but a risk control mechanism, and this makes sense, as a stable financial system depends on accountability at every level.
