The Central Bank of Nigeria (CBN) has put the minimum capital base for commercial banks with international authorisation at N500 billion.
The CBN directed all banks to meet the minimum capital requirement within 24 months commencing from April 1, 2024, and terminating on March 31, 2026.
This was disclosed in a statement issued by the CBN spokesperson, Hakama Sidi-Ali, on Thursday, March 28.
Sidi-Ali said the new minimum capital base for commercial banks with national authorisation is now N200 billion, while the new requirement for those with regional authorisation is N50 billion.
She noted that the new minimum capital for merchant banks is N50 billion, while the new requirements for non-interest banks with national and regional authorisations are N20 billion and N10 billion, respectively.
The latest development comes days after the meeting of the CBN’s Monetary Policy Committee (MPC).
The CBN Governor, Yemi Cardoso, in the meeting, urged Nigerian banks to expedite action on the recapitalisation of their capital base in order to strengthen the financial system.
CBN raises interest rate to 24.75%
Meanwhile, a circular signed by the CBN Director, Financial Policy and Regulation Department, Haruna Mustafa, said all banks were required to meet the new minimum capital requirement within 24 months commencing from April 1 and terminating on March 31, 2026.
According to Mustafa, the move is to enhance banks’ resilience, solvency, and capacity to continue supporting the growth of the Nigerian economy.
Mustafa urged banks to consider injecting fresh equity capital through private placements, rights issues and offers for subscriptions to meet the new minimum capital requirements.
He also suggested Mergers and Acquisitions (M&As) and upgrade or downgrade of licence authorisation.
He said the minimum capital shall comprise paid-up capital and share premium only.
The CBN director noted: “The new capital requirement shall not be based on the shareholders’ fund.
“Additional Tier 1 (AT1) Capital shall not be eligible for meeting the new requirement.
“Notwithstanding the capital increase, banks are to ensure strict compliance with the minimum capital adequacy ratio (CAR) requirement applicable to their licence authorisation.
“In line with extant regulations, banks that breach the CAR requirement shall be required to inject fresh capital to regularise their position.”
Mustafa added that the minimum capital requirement for proposed banks will be paid-up capital, adding that the new minimum capital requirement will apply to all new applications for banking licences submitted after April 1.
He stated: “The CBN will continue to process all pending applications for banking licences for which a capital deposit had been made and an Approval-in-Principle (AIP) had been granted.
“However, the promoters of such proposed banks will make up the difference between the capital deposited with the CBN and the new capital requirement not later than March 31, 2026.”
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