Lagos—Under Governor Olayemi Cardoso, the Central Bank of Nigeria (CBN) continues to pursue its vision of upholding regulatory excellence and strengthening the country’s financial system. The apex bank has reaffirmed its commitment to maintaining a transparent and resilient financial system by reinforcing regulatory compliance and risk management across Nigerian financial institutions.
Since his appointment, Governor Cardoso has been at the forefront of transforming Nigeria’s financial landscape. His leadership has focused on creating a robust financial ecosystem that aligns with global best practices while addressing local challenges.
The Nigerian financial sector has faced numerous challenges recently, including global economic uncertainties, inflationary pressures, and the need for digital transformation. The Central Bank of Nigeria (CBN) has responded with regulatory initiatives to strengthen the sector’s resilience and credibility.
CBN Regulatory Excellence Initiatives
The CBN has implemented several key measures to enhance regulatory compliance:
- Mandatory Compliance and Anti-Money Laundering (AML) Training Workshops
- Strengthened risk management frameworks
- Enhanced due diligence requirements
- Introduction of the FX Global Code for authorized dealers
Banking Sector Performance
Governor Cardoso reports that the banking sector remains robust, with key indicators reflecting a resilient system:
- Non-performing loan ratio within the prudential benchmark of 5%
- Banking sector liquidity ratio exceeding the regulatory floor of 30%
- Successful recapitalization efforts with many banks, meeting new minimum capital requirements ahead of deadlines
Recapitalization Exercise
The CBN’s bank recapitalization exercise, which began in April 2024 and runs until March 2026, has already seen several banks meet the new minimum capital requirements:
- Commercial Banks: N500 billion
- National Banks: N200 billion
- Regional Banks: N50 billion
This initiative aims to enable banks to take on more significant risks in underserved markets, support MSMEs, and drive financial inclusion.
E-Payment Transactions Surge
Electronic payment transactions in Nigeria reached an all-time high of $702.6 billion in the 12 months ending December 2024, representing a 79.6% increase from the previous year. This growth is linked to the CBN’s cashless policy and recent cash crunch.
Financial Inclusion Efforts
The CBN continues to push for greater financial inclusion through:
- Strengthening Primary Mortgage Banks and Microfinance Banks
- Implementing model mortgage foreclosure laws
- Integrating financial institutions into the GSI platform
- Leveraging Development Finance Institutions for increased on-lending
The CBN’s regulatory framework is expected to create a more stable and innovative financial sector in Nigeria. Analysts predict continued growth in digital financial services and further consolidation in the banking sector as institutions work to meet recapitalization requirements.
Under Governor Cardoso’s leadership, the CBN has significantly strengthened Nigeria’s financial system. The combination of regulatory excellence, capital strengthening, and digital innovation positions Nigeria’s financial sector for continued growth and resilience in the face of global challenges.
What’s your take? How effectively have the CBN’s regulatory measures strengthened Nigeria’s financial system? Share your thoughts. A strong financial system is the backbone of economic development—Nigeria’s future looks brighter with these regulatory foundations in place.
