**CBN Tells Banks to Conduct Stress Tests to Ensure Stability** As the deadline for the recapitalisation of Nigerian banks approaches on March 31, 2026, the Central Bank of Nigeria (CBN) has instructed all commercial banks to carry out stress tests. This move is a proactive step to ensure the stability of the financial sector, particularly with the recent surge in deposits. According to the CBN, Nigerian banks deposited a whopping N61.1 trillion with the apex bank in February 2026, indicating an excess of liquidity in the financial sector. The stress tests will help determine the resilience of these financial institutions and assess how they can withstand extreme economic conditions, such as a severe recession or market crash. The CBN has directed the banks to conduct the stress tests, which will evaluate their ability to handle scenarios like a fall in commodity prices, foreign exchange rate movements, and supply chain disruptions. The tests will also assess the impact on non-performing loans (NPLs), loan loss provisions, and capital adequacy ratio (CAR). This directive is in line with the Bank and Other Financial Institutions Act (BOFIA) 2020, which requires banks to maintain sufficient capital to cover risks associated with their activities. The CBN has also stated that this directive is not in conflict with the Guideline on Stress Testing for Nigerian Banks, which was issued in 2019. The stress tests are expected to provide a comprehensive assessment of the banking sector's stability and resilience. As the Nigerian economy continues to navigate its challenges, this move by the CBN is a reassuring step towards ensuring the stability of the financial sector. It is worth noting that the recapitalisation of Nigerian banks is a significant step towards strengthening the financial sector and enhancing its resilience to economic shocks. The CBN's directive on stress tests is a timely reminder of the importance of prudent banking practices and the need for banks to prioritize risk management. In conclusion, the CBN's directive on stress tests is a proactive measure to ensure the stability of the financial sector and protect the interests of depositors. As the deadline for recapitalisation approaches, this move is a reassuring step towards a stronger and more resilient banking sector.