CBN Enforces Stricter Regulations on Insider Lending
The Central Bank of Nigeria (CBN) has intensified its enforcement of banking regulations, focusing on insider lending, corporate governance, and large loans. Dr Olubukola Akinwunmi, the Director of Banking Supervision at the CBN, announced these measures at the 37th Finance Correspondents Association of Nigeria (FICAN) Conference in Abuja.
The new framework, introduced in March 2026, aims to strengthen banks following a recent recapitalisation exercise and reduce the risk of future capital-raising efforts. Banks must maintain sufficient capital based on their risk profiles, with particular scrutiny on insider-related lending due to its potential to weaken financial positions.
The framework, based on Sections 13 and 63 of the Banks and Other Financial Institutions Act (BOFIA), includes stress tests for various risks. Akinwunmi also stated that the CBN is enforcing its Insider Credit Circular from February 2025, which has led to some bank owners and board members resigning.
Additionally, the CBN is implementing a digital Supervisory Examination Application to enhance bank inspections.
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