The Central Bank of Nigeria (CBN) has disclosed that some bank owners, shareholders and board members have exited the banking industry amid stricter enforcement of rules governing loans to bank insiders.
The regulator also warned that directors who persist in insider-credit violations risk losing their board positions as it intensifies efforts to strengthen corporate governance and protect banks from excessive risk-taking.
The CBN’s Director of Banking Supervision, Dr Olubukola Akinwunmi, disclosed this on October 9, 2026, at the 38th Seminar for Finance Correspondents and Business Editors in Abuja, according to a report by Nairametrics published the same day.
Akinwunmi said the departures followed closer monitoring of insider-related credit facilities after the CBN issued a directive on February 17, 2025. He did not identify the affected individuals or banks.
“You would have seen that some owners of banks or some shareholders of banks are big, and maybe some of the board members have exited the banking system because the bank is strictly monitoring that,” he said.
He added that the regulator had warned banks that directors could no longer remain on their boards if insider-credit problems persisted, describing corporate governance as fundamental to banking-sector resilience.
Insider credit refers to loans and other credit facilities granted to individuals or businesses connected to a bank, including directors, senior executives, significant shareholders and companies they own or control.
The CBN’s February 17, 2025, circular, titled Compliance with Insider-Related Credit Limits, directed banks to bring certain facilities exceeding statutory limits into compliance within 180 days. The deadline applied to facilities approved by the CBN without specific timelines, while facilities approved with defined timelines were to be regularised within those periods, according to a report by Tribune Online published on February 18, 2025.
The directive required affected individual director-related facilities to be brought within 5% of a bank’s paid-up capital, while aggregate insider-related facilities were not to exceed 10% of paid-up capital, in line with the limits cited under Section 19(5) of the Banks and Other Financial Institutions Act (BOFIA) 2020.
The CBN also directed banks to ensure that directors with non-performing insider-related facilities stepped down immediately. Banks were instructed to begin recovering outstanding debts, including through the enforcement of collateral and recovery of affected directors’ shareholdings.
Akinwunmi warned that unchecked insider lending and weak governance could undermine the gains achieved through banking-sector recapitalisation.
“If there is poor corporate governance, if insider credit pervades the industry, in a short time we will all live to see a repeat of the problem that we have battled or we have dealt with through recapitalisation,” he said.
He said the CBN had intensified enforcement of prudential rules covering insider credit, large exposures and single-obligor limits under Governor Olayemi Cardoso.
Akinwunmi also said the regulator’s risk-based capital framework would require banks to hold capital that reflects their risk exposures, including risks associated with insider lending.
The tougher enforcement signals the CBN’s effort to ensure that stronger capital positions are supported by responsible lending, effective board oversight and compliance with banking regulations.
