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Tuesday, April 23, 2024

ACAMB hails CBN’s recapitalization move, says banks have capacity to meet target

ACAMB Applauds CBN's Strategic Approach to Strengthening Banking Sector Amidst Global Economic Challenges

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The Association of Corporate & Marketing Communication Professionals of Banks (ACAMB) has welcomed the long-awaited circular released by the Central Bank of Nigeria (CBN) outlining the roadmap for the anticipated recapitalization of the banking sector.

Following the initial announcement of the recapitalization plan by CBN Governor, Dr. Olayemi Cardoso, ACAMB, alongside other key stakeholders in Nigeria’s banking sector, had affirmed their support for the initiative. This collective backing reflects ACAMB’s commitment to fostering growth and resilience within the Nigerian banking landscape as the nation endeavors to harness its potential for global emergence.

The recent CBN circular, which reviews the minimum capital requirement for commercial, merchant, and non-interest banks over the next 24 months, has effectively allayed any apprehensions regarding the objectives, procedures, and potential outcomes of the recapitalization exercise.

The underlying objective of the recapitalization initiative is to reinforce the safety and reliability of Nigerian banks while empowering them to meet the evolving demands of both domestic and international financial markets. This aligns with the CBN’s developmental mandate to enhance the capacity and competitiveness of banks in driving economic growth and financial intermediation.

ACAMB commends the CBN for its meticulous approach to outlining the modalities for recapitalization, particularly emphasizing the distinct definition of the new minimum capital base for each bank category. By incorporating both share capital and share premium, as opposed to previous criteria based on shareholders’ funds, the CBN has provided clarity and transparency in the recapitalization process.

The extended timeline until 2026 offers banks ample opportunity to implement their recapitalization strategies methodically, mitigating any potential disruptions or crowding effects within the financial market. Moreover, the resilience and favorable performance of Nigerian banks amid economic challenges reaffirm investor confidence and underline the potential for stronger banks and enhanced returns following the recapitalization.

As the banking industry collaborates with regulatory authorities to navigate the recapitalization journey, ACAMB pledges to engage with all stakeholders to ensure transparent and balanced representation throughout the process. Importantly, ACAMB reassures depositors and shareholders of Nigerian banks to continue their transactions with confidence, as the industry remains steadfast in its commitment to stability and growth.

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