Of the 44 licensed Nigerian commercial, non-commercial and merchant banks, eight have been able to meet their threshold 16 months after the Central Bank of Nigeria (CBN) rolled out a recapitalisation policy.
On March 28, 2024, Yemi Cardoso’s CBN announced the recapitalisation regime, stating it was to “strengthen Nigerian banks against external and domestic shocks as well as enhance the stability of the financial system”.
At the 301st Monetary Policy Committee’s meeting held in Abuja on Tuesday, CBN Governor Cardoso said that eight banks had met their targets. He did not mention the names of the banks.
“The MPC noted that eight banks have fully met the recapitalisation requirements while others are making progress towards meeting the deadline,” the chief financial officer of the bank said.
“The committee thus urged the management of the bank [CBN] to sustain its oversight of the banking system to ensure continued resilience, safety and soundness of the financial system.”
Primarily, the apex bank retained the interest rate at 27.50%, making it the third time the rate would remain at that figure.
Notably, the number of banks with the required capital base represents 18.11% of the banks affected by the new capital requirements.
Commercial banks with international licences are expected to raise their capital to N500 billion, those with national authorisations, N200 billion; and banks in the regional category, N50 billion.
The minimum capital for regional merchant banks is N50 billion. For national and regional non-interest banks, the minimum is N20 billion and N10 billion respectively.
Collectively, these banks have until March 31, 2026, to comply with this new order.
The apex bank said it would take appropriate steps against any bank that failed to comply with the new requirements.
“In the event of non-compliance with the new capital requirements at the expiry of the transition timeline, the CBN will take appropriate steps in line with the provisions of relevant laws and regulations to sustain confidence in the banking system,” the bank said in its March 2024 statement.
Usually, any bank with an insufficient capital base could be merged with another or acquired by a stronger entity.
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