In a statement issued by its Acting Director of Corporate Communications, Sidi Ali, the CBN disclosed that commercial banks holding international licenses must raise their capital base to N500bn, while national banks are required to attain N200bn. Banks with regional authorization face a N50bn capital requirement.
This move follows the Monetary Policy Committee’s recent indications of impending changes to the nation’s banking capitalization. At a press briefing following its 294th meeting, CBN Governor Olayemi Cardoso emphasized the urgency for DMBs to bolster their capitalization to fortify the financial system against potential risks.
While the current capital base varies based on banking licenses, the proposed increase echoes the landmark 2004 banking reform, which elevated the minimum capital from N2bn to N25bn, precipitating significant industry consolidation.
Cardoso’s announcement at the 58th Annual Bankers’ Dinner in November 2023 foreshadowed this policy shift, aligning with Nigeria’s ambition to reach a $1tn economy by 2026. The CBN’s directive underscores a strategic imperative to align banking capacity with the nation’s ambitious economic trajectory.
Despite apprehensions voiced by industry observers, the CBN remains resolute, mandating all banks to meet the new capital requirements within a 24-month window, leveraging various avenues including private placements, rights issues, mergers, and acquisitions.
As Nigeria charts its course towards economic ascendancy, the CBN’s bold stance on banking recapitalization signals a pivotal step towards fortifying the financial sector for future challenges.
