One year into Olayemi Cardoso’s drive to strengthen Nigeria’s banking system, the Central Bank of Nigeria (CBN) says its reforms have reshaped how banks are supervised, managed risks and prepared for future shocks. The measures, outlined in the apex bank’s latest Annual Report, show a shift from reacting to banking problems to identifying vulnerabilities before they threaten financial stability.
At the heart of the reforms is a risk-based supervisory framework that places greater emphasis on prevention. Rather than relying solely on routine compliance checks, the CBN intensified both offsite surveillance of banks’ financial returns and onsite examinations, including special investigations, to detect emerging risks early. The approach, backed by the CBN Act 2007 and the Banks and Other Financial Institutions Act (BOFIA) 2020, is aimed at ensuring the banking industry remains safe, sound and resilient.
One of the most significant policy changes during the period was the increase in the minimum capital requirement for banks, a move intended to strengthen lenders’ capacity to absorb losses and support larger financing needs in the economy. The CBN also standardised reporting requirements for foreign currency exposures, adjusted the Cash Reserve Requirement framework and applicable rates, and reduced the minimum Loan-to-Deposit Ratio requirement as part of broader efforts to improve risk management and banking sector stability.
