In an exposure draft released on June 10, the regulator said the revisions are intended to address gaps identified since the original guidelines were introduced in 2014 and to align the framework with evolving market and regulatory developments.
Under the proposed rules, a financial holding company would be required to maintain regulatory capital exceeding the combined minimum capital requirements of its subsidiaries by at least 20%, reinforcing the role of HoldCos as a source of financial strength for their operating entities.
The draft also introduces a significant ownership threshold, requiring holding companies to maintain a minimum 51% equity stake in each subsidiary and to be registered as a person with significant control by the relevant corporate registration authority.
The proposed changes could have implications for major Nigerian banking groups operating under holding company structures, including those with interests spanning banking, insurance, asset management, payments, and pension businesses.
Foreign Subsidiary Ownership Shift
One of the most notable changes would allow financial holding companies, rather than their Nigerian banking subsidiaries, to directly own foreign subsidiaries. The CBN said the measure is designed to streamline group structures and improve regulatory oversight.
The regulator also seeks to establish clearer eligibility requirements for promoters seeking to establish new financial holding companies.
Restrictions on Shared Services and Branding
The draft introduces stricter controls around shared services arrangements within banking groups, requiring such transactions to be conducted on an arm's-length basis and subject to periodic value-for-money audits.
Financial holding companies and their subsidiaries would be required to submit quarterly disclosures detailing shared services arrangements, including service providers, beneficiaries, costs, and pricing methodologies.
In a move aimed at preserving the non-operating status of HoldCos, the CBN proposes restrictions on advertising activities. Holding companies would generally be prohibited from advertising themselves independently or jointly with subsidiaries, except in connection with share offerings.
Corporate Governance Tightened
The revised guidelines also seek to strengthen governance standards across banking groups. Directors of a holding company would be limited to serving on the board of only one subsidiary within the group, while the number of HoldCo directors on a subsidiary's board would be capped at 20% of total board membership.
The CBN further proposes prohibiting serving employees of a HoldCo from being appointed as non-executive directors within the group structure In addition, subsidiaries would be barred from acquiring shares in their parent holding company or sister subsidiaries, a measure intended to prevent circular ownership structures.
Limits on Intra-Group Transactions
The regulator is also seeking to curb excessive intra-group exposures. Under the draft, loans from banking subsidiaries to their holding companies would be treated as a return of capital and deducted from the bank's regulatory capital when calculating capital adequacy ratios.
HoldCos would be prohibited from obtaining financing backed by subsidiary guarantees, except where such facilities are secured by dividend income or service-level agreements.The exposure draft further limits contingent liabilities assumed by a HoldCo on behalf of subsidiaries to 20% of shareholders' funds unimpaired by losses.
Industry Consultation Opens
The CBN has invited comments from financial institutions, industry stakeholders and members of the public on the proposed framework. Feedback is to be submitted by July 9, 2026.
The review comes as Nigerian banking groups continue to expand across financial services verticals and geographic markets, prompting regulators to seek stronger safeguards against contagion risks, governance failures and capital weaknesses within complex financial conglomerates.
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