CBN Tightens Compliance: No Room for Banks to Cut Corners as Risk Controls Face Tougher Scrutiny

 The Central Bank of Nigeria (CBN) is tightening its supervisory approach to ensure that stronger bank balance sheets are matched by stronger risk management, corporate governance and regulatory compliance.

 Speaking at the CBN’s 38th Annual Seminar for Finance Correspondents and Business Editors in Abuja, the apex bank warned that increased capitalisation would not shield banks from regulatory scrutiny or justify excessive risk-taking.

 From a compliance perspective, the regulator’s message is clear: capital adequacy must be supported by effective internal controls, sound governance and disciplined risk management. The CBN said it would continue to intensify risk-based supervision, macroprudential surveillance and stress testing across the banking sector.

 The Director of Banking Supervision, Olubukola Akinwunmi, said there would be no room for banks to sidestep regulatory requirements in pursuit of profitability. He pointed to heightened enforcement around insider credits, corporate governance and offshore investments, warning that breaches previously tolerated would no longer receive regulatory accommodation.

 Banks are also expected to strengthen controls beyond traditional credit risk. The CBN identified market, liquidity and operational risks, cybersecurity, third-party dependencies and climate-related financial risks as areas requiring stronger monitoring and mitigation frameworks.

 The regulator further emphasised the need for robust customer-data protection, cybersecurity, disaster recovery and business continuity arrangements, particularly as financial services become increasingly digital.

 The compliance implications extend to boards and senior management, who are expected to demonstrate accountability and ensure that risk exposures are identified early and addressed before they threaten institutional resilience.

 The CBN also disclosed that it has moved towards more proactive supervision, including the implementation of risk-based capital requirements introduced in March 2026, under which banks are required to maintain capital commensurate with their individual risk profiles and business models.

 For banks and their compliance functions, the post-recapitalisation environment therefore brings a stronger emphasis on evidence of effective controls, timely risk identification, regulatory reporting and demonstrable adherence to prudential requirements.

 The message from the regulator is increasingly direct: stronger capital buffers are not a substitute for compliance, and banks will be expected to demonstrate that their governance and control frameworks are capable of withstanding emerging financial, operational and technology-related risks.