The Central Bank of Nigeria (CBN) has introduced revised minimum capital requirements for banks, mandating commercial banks with international authorization to maintain a minimum capital base of ₦500 billion.
This directive, outlined in a circular signed by Haruna Mustafa, Director of the Financial Policy and Regulation Department, applies to commercial, merchant, and non-interest banks, with a transition period of 24 months starting April 1, 2024, and ending on March 31, 2026.
Confirming the directive, CBN spokesperson Hakama Sidi Ali emphasized that commercial banks with national authorization must now hold a minimum capital base of ₦200 billion, while those with regional authorization require ₦50 billion.
Merchant banks are mandated to maintain ₦50 billion, and non-interest banks, ₦20 billion for national authorization and ₦10 billion for regional authorization.
The announcement follows recent remarks by CBN Governor Olayemi Cardoso urging banks to expedite capital base recapitalization efforts to fortify the financial system.
Cardoso had previously stated that commercial banks would be directed to increase capital to support the $1 trillion economic vision of President Bola Tinubu’s administration.
The last capital increase for banks occurred in 2005 during Charles Soludo’s tenure as CBN Governor, raising the capital base from ₦2 billion to ₦25 billion. To assist banks in meeting the new requirements, the CBN has suggested various strategies including equity injections, mergers, and acquisitions.
Banks must submit implementation plans by April 30, 2024, outlining their chosen methods and timelines. The CBN will monitor compliance and expects all new banking license applications to adhere to the revised capital requirements, effective April 1, 2024. Pending license applications must also fulfill the new capital demands by March 31, 2026, to proceed.
