Just in:CBN gives banks 24 months to increase capital base to N500b

The Central Bank of Nigeria (CBN) has issued a 24-month ultimatum to banks to raise their capital base to a new minimum in a move to strengthen the financial system.

The new requirement puts the minimum capital base for banks with international authorisation at ₦500 billion.

CBN also raised the minimum capital base for commercial banks with national authorisation to ₦200 billion, while those with regional authorisation was jerked up to ₦50 billion.

Also, the minimum capital for merchant banks is now ₦50 billion, while the new requirements for non-interest banks with national and regional authorisations were raised to ₦20 billion and ₦10 billion, respectively.

This was announced Thursday night in a statement released by Hakama Sidi Ali, the CBN acting director, corporate communications department.

The move which was initially disclosed by the CBN Governor, Olayemi Cardoso, in his address to the Annual Bankers’ Dinner in November 2023, was to enhance banks’ resilience, solvency, and capacity to continue supporting the growth of the Nigerian economy.

Quoting a circular signed by Haruna Mustafa CBN Director, Financial Policy and Regulation Department to all commercial, merchant, and non-interest banks and promoters of proposed banks, Sidi Ali emphasized that the timeline for the recapitalization programme is within 24 months commencing from April 1, 2024, and terminating on March 31, 2026.

To enable the banks meet the new minimum capital requirements, the CBN urged them to consider injecting fresh equity capital through private placements, rights issues and/or offers for subscription; Mergers and Acquisitions (M&As); and/or upgrade or downgrade of license authorisation.

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