In an effort to strengthen the financial stability of the Nigerian banking sector, the Central Bank of Nigeria (CBN) has set a deadline for banks to submit detailed plans for meeting the newly introduced minimum capital requirements. All commercial, merchant, and non-interest banks, along with promoters of proposed banks, are required to submit their implementation plans by April 30, 2024. These plans should clearly outline the steps the banks will take to meet the new capital thresholds, detailing the specific strategies and timelines for each action.
The CBN emphasized its commitment to overseeing the implementation of these requirements, ensuring banks adhere to the deadlines and regulatory standards. This move comes after the CBN announced an increase in the minimum capital base for various types of banks, including those with international, national, and regional authorizations.
The new minimum capital requirement for commercial banks with international authorization is set at N500 billion, while for those with national authorization, the figure is N200 billion. Regional banks now have a new threshold of N50 billion in capital. Merchant banks will now need to have N50 billion in capital, while non-interest banks will face a new minimum of N20 billion for national authorization and N10 billion for regional authorization.
In a circular issued by the CBN, signed by Haruna Mustafa, the Director of the Financial Policy and Regulation Department, it was highlighted that the new capital base must be fully met within 24 months, starting from April 1, 2024, and concluding on March 31, 2026. This includes all new banking license applications submitted after April 1, 2024.
For banks in the process of securing licenses before this date, the CBN will continue processing their applications as long as the capital deposit has been made and an Approval-in-Principle has been granted. However, promoters of such banks must make up the difference between the amount deposited and the new capital requirement by the end of March 2026.
CBN spokesperson Hakama Sidi Ali confirmed the update, explaining that these new capital requirements were part of the bank’s strategy to strengthen the country’s banking system. The new measures are also in line with the vision to support the President’s economic goal of expanding Nigeria’s economy to $1 trillion.
The move to raise the capital base is a significant step in fortifying the financial system. CBN Governor, Olayemi Cardoso, encouraged banks to take the necessary steps to raise their capital and align with the regulatory changes. The CBN’s last major increase in the capital base occurred in 2005, under the leadership of former CBN Governor Charles Soludo, when the threshold was raised from N2 billion to N25 billion.
