Central Bank Of Nigeria Implements New Capital Requirements For Major Banks, Set At N500 Billion

Central Bank Of Nigeria Implements New Capital Requirements For Major Banks, Set At N500 Billion....KINDLY READ THE FULL STORY HERE▶

Just 48 hours subsequent to reiterating the necessity for augmenting the capital base of Deposit Money Banks to enhance productivity, the Central Bank of Nigeria (CBN) has unveiled fresh guidelines concerning its bank recapitalization policy.

The new directives were revealed via a statement issued by the Acting Director of Corporate Communications, Sidi Ali, in Abuja on Thursday.

Ali stated that the CBN has instructed commercial banks holding international authorization to elevate their capital base to N500 billion, while national banks are mandated to reach N200 billion.

Under the directives, commercial banks holding national licenses are required to meet a N200 billion threshold, while those with regional authorization must achieve a N50 billion capital minimum.

Similarly, non-interest banks possessing national and regional authorizations are obliged to raise their capital to N20 billion and N10 billion, respectively.

This move by the CBN follows closely after the Monetary Policy Committee hinted at adjustments to the capital base of the nation’s banks during its 294th MPC meeting.

During the meeting, CBN Governor Olayemi Cardoso urged Deposit Money Banks to expedite actions to fortify their capital base, aiming to bolster the financial system against potential risks.

However, the latest policy directive from the CBN specifies that commercial banks holding international authorization are now obligated to bolster their capital base to N500 billion.

This proposed augmentation in capital comes almost two decades after the CBN’s 2004 banking reform, which saw a surge in the minimum capital base from N2 billion to N25 billion, characterized by significant merger and acquisition activities that reduced the number of banks in the country from 89 to 25.

Last year, The BUSHRADIOGIST reported exclusively that chief executive officers and other top executives of Deposit Money Banks had commenced initiatives to raise fresh capital through preliminary merger and acquisition talks.

Recall that in November 2023, Cardoso, during the 58th Annual Bankers’ Dinner organized by the Chartered Institute of Bankers of Nigeria, unveiled plans for a new round of banking recapitalization, aiming to bolster the capacity of the apex bank to support Nigeria’s aspiration of becoming a $1 trillion economy by 2026.

Cardoso emphasized the need to fortify the banking industry to meet future challenges, particularly in servicing an envisioned larger economy. This call for action, he asserted, includes directing banks to increase their capital as a primary measure.

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