By Babajide Komolafe
Deposit Money Banks (DMBs) slashed lending to oil and gas, information and communication technology (ICT) and six other key sectors of the economy by N5.45 trillion or 14.8 per cent, year-on-year (YoY), in 2025, reflecting the impact of the Central Bank of Nigeria’s (CBN) withdrawal of regulatory forbearance and banks’ loan portfolio clean-up.
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Regulatory forbearance is a central bank policy that temporarily allows financial institutions to maintain operations and restructure bad loans even if they fall below strict capital or asset-quality requirements. It is designed to prevent bank failures and widespread credit crunches during economic crises.
As at first quarter of 2025 the total amount of money tied up in the CBN’s regulatory forbearance loans for seven major banks was $4.01 billion (over ¦ 6 trillion). This figure represents high-risk credit exposures and breaches of the Single Obligor Limit (SOL) that the apex bank had temporarily permitted. The withdrawal in 2025 compelled the banks to pay the monies to CBN, leaving them with reduced capacity to grant loans.
