In a move aimed at bolstering the stability and resilience of Nigeria’s banking sector, the Central Bank of Nigeria (CBN) has introduced new minimum capital requirements for banks.
Under the directive, commercial banks with international authorization are mandated to have a minimum capital base of ₦500 billion.
The announcement was made via a circular issued by Haruna Mustafa, the Director of the Financial Policy and Regulation Department at CBN, addressed to all commercial, merchant, and non-interest banks, as well as promoters of proposed banks.
The circular emphasised that banks are required to meet the new minimum capital requirements within 24 months, starting on April 1, 2024, and ending on March 31, 2026.
Hakama Sidi Ali, the spokesperson for CBN, confirmed the development in Abuja on Thursday, highlighting the significance of the new regulations in strengthening the country’s financial sector.
Under the revised framework, the minimum capital base for commercial banks with national authorization has been raised to ₦200 billion, while those with regional authorization must maintain a minimum capital base of ₦50 billion. Merchant banks are also required to adhere to a minimum capital requirement of ₦50 billion, while non-interest banks with national and regional authorizations must maintain minimum capital bases of ₦20 billion and ₦10 billion, respectively.
The directive comes shortly after Olayemi Cardoso, the CBN Governor, urged deposit money banks to expedite their recapitalization efforts to fortify the financial system. Governor Cardoso, who assumed office two months prior, had previously indicated that the increase in capital base was aligned with the government’s ambition to grow the economy to $1 trillion, as championed by President Bola Tinubu’s administration.
This adjustment marks the first significant increase in capital requirements for banks since 2005, during the tenure of Charles Soludo as the CBN Governor. At that time, the capital base was raised from ₦2 billion to ₦25 billion.
More updates are expected to follow soon
