The Central Bank of Nigeria (CBN) is taking decisive steps to reinforce the country’s financial system through strict compliance measures, risk management strategies, and a comprehensive bank recapitalization drive. Under the leadership of Olayemi Cardoso, the apex bank is committed to maintaining financial stability, fostering economic resilience, and ensuring Nigeria’s financial sector aligns with global best practices.
As part of its regulatory framework, the CBN recently collaborated with Citi to host a high-level workshop on compliance and Anti-Money Laundering (AML) protocols in Lagos. The event brought together compliance officers, trade operations specialists, and correspondent banking teams to address global financial risks and strengthen banking relationships.
According to Shola Phillips, Special Adviser to the CBN Governor on Compliance, financial institutions must implement dynamic, risk-based AML strategies to safeguard the integrity of the financial system.
Siobhan Ni Ealaithe, Managing Director of Citi’s Correspondent Banking Group, emphasized the importance of robust Know Your Customer (KYC), Know Your Business (KYB), and Know Your Transaction (KYT) protocols in preventing financial crimes. Similarly, Stephanie Bailey, Head of EMEA AML Risk Management, highlighted that illicit financial transactions amount to over $3 trillion annually, stressing the need for technology-driven risk assessments and enhanced transparency measures.
The CBN Governor, Olayemi Cardoso, underscored the importance of ethics and professionalism in Nigeria’s banking sector. He announced the adoption of the FX Global Code for all authorized dealers, urging the Chartered Institute of Bankers of Nigeria (CIBN) to uphold the highest industry standards. “We are intensifying market surveillance to eliminate bad actors and ensure full compliance with regulations. Our approach remains zero tolerance for non-compliance,” Cardoso stated.
Despite global economic uncertainties, Cardoso reassured stakeholders that Nigeria’s banking sector remains resilient, with key financial indicators reflecting stability such as Non-Performing Loan (NPL) ratio remains within the regulatory benchmark of 5%, liquidity ratio exceeds the required 30%, ensuring adequate cash flow and stress tests reaffirmed the strength of the banking system.
To enhance the banking sector’s ability to support economic growth, the CBN introduced a two-year recapitalization plan starting April 1, 2024, and ending March 31, 2026. The new capital requirements are N500 billion for international banks, N200 billion for national banks and N50 billion for regional banks.
Many financial institutions have already met these requirements ahead of the 2026 deadline. The recapitalization initiative aims to expand financial inclusion, allowing banks to take on greater risks and provide increased lending to Micro, Small, and Medium Enterprises (MSMEs) and underserved markets.
Industry analysts anticipate a surge in mergers and acquisitions (M&A) as banks explore strategic partnerships to meet capital obligations. In 2024, the CBN approved the first M&A deal between Providus Bank and Unity Bank. Additionally, Access Holdings Plc, Ecobank Nigeria, and Jaiz Bank Plc have successfully met the new capital thresholds.
The CBN Governor praised Nigeria’s fintech ecosystem for driving financial inclusion and attracting foreign investments. Several Nigerian fintech firms have attained unicorn status, positioning the country as a leader in Africa’s digital banking space.
However, Cardoso cautioned fintech companies and banks to strengthen KYC onboarding processes to prevent fraudulent activities. He emphasized the need for enhanced transaction monitoring and consumer protection measures, particularly for vulnerable populations.
Nigeria’s shift towards a cashless economy has resulted in a record-breaking surge in electronic payment transactions. Data from the Nigeria Interbank Settlement System (NIBSS) revealed that e-payment transactions reached $702.6 billion in 2024, marking a 79.6% increase from 2023.
The highest transaction volumes occurred in December 2024, reflecting heightened economic activity during the festive period. The growth in e-payments is attributed to the CBN’s cashless policy, which limits daily cash withdrawals, increased adoption of mobile money, POS transactions, and online banking as well as advancements in Nigeria’s digital payment infrastructure.
The CBN, SEC, and NDIC continue to work together to strengthen Nigeria’s financial system, ensuring that it remains competitive on the global stage.
With stringent compliance frameworks, enhanced banking recapitalization, and a thriving fintech sector, Nigeria’s financial system is evolving to meet international standards. The CBN’s proactive measures aim to ensure long-term economic stability, financial security, and increased investment opportunities. As the banking sector adapts to new regulatory landscapes, stakeholders must remain committed to transparency, innovation, and sustainable growth.
