By the KIIN360 Editorial Team
You won’t see it trending on social media. It won’t show up in your bank app notifications. But right now, somewhere in Abuja, regulators could be letting your bank off the hook. And you’d have no idea.
It’s called regulatory forbearance, and while it sounds like something only bankers and economists care about, it’s already affecting your loans, your savings, your business, and maybe even your job.
Let’s break it down.
What is Regulatory Forbearance?
Imagine your bank is in trouble. Under normal rules, it should be flagged, penalized, or forced to clean things up. But instead of cracking down, regulators give it a break. They might delay deadlines to raise capital. They might ignore loan defaults for now. They might just stop enforcing key rules altogether.
That’s regulatory forbearance. It’s like a hall pass for banks. And it’s legal.
Sometimes it helps. But sometimes it lets serious problems stay hidden.
When It Works and When It Backfires
Let’s be fair. This tool can be useful. During the COVID-19 pandemic, Nigerian banks were allowed to give customers breathing room. Loan repayments were restructured. Panic was avoided. That was the smart use of forbearance.
But there’s a dark side. In the US during the 1980s, banks that were clearly failing were allowed to continue. The delay made the crisis worse and cost taxpayers billions. In Japan, weak banks were never forced to clean up. They stayed alive on paper but stopped helping the real economy. Economists called them zombie banks.
In Nigeria, after the 2009 crisis, we saw our own version. The Central Bank and AMCON stepped in to rescue troubled banks by buying up toxic assets. It stabilized things. But it also taught some banks the wrong lesson. That they could take reckless risks and still be saved.
If You Think This Has Nothing to Do With You, Think Again
This isn’t just about bankers in suits. If your bank is being protected quietly, it could mean your money isn’t as safe as you think. It could mean loan terms change without explanation. It could mean the entire system is more fragile than it looks.
These hidden moves affect businesses, entrepreneurs, job seekers, and everyday Nigerians.
And right now, Nigeria is once again in a financial pressure cooker. Inflation is high. The naira is shaky. Banks are being told to raise more capital. In the background, we wouldn’t be surprised if quiet forbearance is already happening.
But no one is talking about it.
The KIIN360 Take: Use It, But Don’t Abuse It
We’re not against forbearance. Sometimes the rules do need to bend. But Nigerians deserve to know when that’s happening and why.
We believe in four simple principles:
• Only use it when absolutely necessary
• Be transparent with the public
• Set clear timelines and exit plans
• Educate people so they’re not left in the dark
If you’re going to let banks break the rules, even temporarily, at least let the people understand what’s going on. Otherwise, it’s just a quiet bailout with zero accountability.
Final Word: Pay Attention
The next time you hear about bank recapitalization or new CBN rules, don’t tune out. That news affects your wallet. Your business. Your future.
Forbearance might sound like insider policy talk, but it shapes the reality you live in. And if no one’s watching, it becomes a tool for hiding the truth instead of solving problems.
So ask questions. Stay informed. And remember, financial stability should never come at the cost of public trust.