By Precious Mark
The Central Bank of Nigeria (CBN) has released two major draft regulatory frameworks aimed at tightening oversight of the country’s financial system, improving transparency, and reducing systemic risks across closely linked financial institutions.
The proposed guidelines, issued through the Financial Policy and Regulation Department of the CBN in Abuja on June 10, 2026, cover ring-fencing operations of closely linked entities and a revised framework for the licensing and regulation of Financial Holding Companies (FHCs) in Nigeria.
According to the circular, the apex bank said the move is part of its broader mandate to ensure a safe and stable financial system.
“In furtherance to the mandate to promote a safe, sound and stable financial system, safeguard consumer interests and strengthen regulatory oversight within the Nigerian financial system, the Central Bank of Nigeria (CBN) has developed the draft Guidelines on Ring-Fencing Operations of Closely Linked Entities in the Nigerian Financial System,” it stated.
The CBN explained that the proposed framework seeks to clearly separate operations between interconnected financial institutions to prevent regulatory loopholes and risks arising from overlapping business activities.
It added that the guidelines “seek to establish clear operational and functional boundaries among closely linked entities within the financial system as well as address regulatory arbitrage arising from the commingling of activities across different licence categories.”
The draft also introduces provisions covering governance structures, intra-group transactions, customer fund protection, data segregation, operational independence, and recovery planning.
The apex bank further noted that the objective is to “strengthen consumer protection, enhance transparency and accountability, mitigate contagion risks among closely linked entities, and preserve financial stability while supporting innovation and fair competition within the financial services sector.”
In a separate circular, the CBN also unveiled an exposure draft of the revised guidelines for Financial Holding Companies, originally introduced in 2014.
The bank explained that the earlier framework was designed to reduce risks associated with non-core banking activities within financial groups, but required updates due to emerging market realities.
“Following several years of implementation, the CBN has identified areas within the extant Guidelines that require enhancement to strengthen the operational effectiveness and regulatory oversight of Financial Holding Companies,” CBN stated.
The revised framework introduces stronger capital requirements, tighter rules on shared services, and clearer eligibility conditions for promoters seeking to establish financial holding companies.
On capital reforms, the apex bank said the changes are aimed at ensuring FHCs remain financially strong enough to support their subsidiaries.
It also warned that gaps in shared services arrangements must be addressed to prevent misuse or unfair advantage within banking groups.
Stakeholders, including banks, other financial institutions, payment service providers, and the general public, have been invited to review and submit feedback on both draft guidelines.
The move is expected to trigger wide industry consultations as regulators push to strengthen financial stability and improve oversight across Nigeria’s evolving financial ecosystem.