The Central Bank of Nigeria (CBN) has unveiled a new minimum capital requirements for banks.
The announcement, made by CBN Acting Director of Corporate Communications, Mrs. Hakama Sidi Ali, states that commercial banks seeking international authorisation must meet a threshold of N500 billion, while those with national authorisation are required to have a minimum capital of N200 billion.
Additionally, banks operating with regional licenses must now maintain a capital base of N50 billion.
The directive is a part of the CBN’s efforts to bolster the resilience and solvency of financial institutions, thereby enhancing their capacity to support the nation’s economic growth.
The CBN has set a deadline of March 31, 2026, for banks to fulfil the new capital requirements. To achieve this, banks are encouraged to explore various avenues, including private placements, rights issues, mergers and acquisitions, or license authorisation upgrades/downgrades.
Moreover, merchant banks must maintain a minimum capital of N50 billion, while non-interest banks with national and regional authorisations are mandated to raise their capital thresholds to N20 billion and N10 billion, respectively.
The regulatory authority emphasises the importance of compliance with the minimum capital adequacy ratio (CAR) requirement and warns of consequences for banks failing to meet these standards. Banks are expected to submit implementation plans outlining their strategies for meeting the new capital requirements by April 30, 2024.
Furthermore, the CBN clarifies that existing banks’ minimum capital shall comprise paid-up capital and share premium only, excluding retained earnings from shareholders’ funds calculation.
This move signifies a proactive approach by the CBN to strengthen the stability of Nigeria’s banking sector, ensuring it remains robust and capable of driving economic development.
