The Central Bank of Nigeria has revealed that some bank owners, shareholders and board members have left the banking industry following stricter enforcement of insider credit regulations.

The apex bank warned that directors who continue to abuse insider lending rules risk losing their board positions.

The CBN’s Director of Banking Supervision, Dr Olubukola Akinnwunmi, disclosed this at the 38th Seminar for Finance Correspondents and Business Editors in Abuja.

Although he did not name the affected individuals or banks, Akinnwunmi attributed the exits to the CBN’s February 2025 circular on insider credit and its stricter enforcement of prudential regulations.

Akinnwunmi said the CBN’s tighter monitoring of insider lending had led to the exit of some bank owners, shareholders and board members.

He added that the regulator had warned banks that directors could lose their board positions if insider credit violations persisted.

He said strong corporate governance was critical to the resilience of the banking sector, adding that the CBN would continue to enforce compliance with its regulations.

He said, “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.

“We have had occasions where we had to point out to banks that if this insider credit persists, this person can no longer continue to be in your bank on the board of your bank, because corporate governance is the bedrock of resilience.

“The bank, under the leadership of Governor Olayemi Cardoso, has made it clear to the banking system that we will follow the rules to the letter, and it’s all in the interest of the banking system and its resilience.”

Insider credit refers to loans or credit facilities extended by banks to individuals or entities connected to them, including directors, senior executives, major shareholders and companies they own or control.

Akinnwunmi said the enforcement of insider credit regulations, large exposure limits and single-obligor limits had reached an unprecedented level under the CBN’s current regulatory approach.

The move follows the CBN’s February 2025 directive requiring banks to address insider-related credit facilities that exceed regulatory limits. Nairametrics previously reported that banks were given 180 days to regularise facilities that breached the limits stipulated under the Banks and Other Financial Institutions Act.