The Central Bank of Nigeria has increased the minimum capital requirement for commercial banks with national licences from N25 billion to N200 billion.
The CBN also increased the capital base of banks with regional licences from N15 billion to N50 billion and those with international licences from N100 billion to N500 billion.
According to a statement by the bank’s spokesman, Hakama Sidi-Ali, the new minimum capital for merchant banks will be N50 billion.
The statement also announced that the new requirements for non-interest banks with national and regional authorisations are N20 billion and N10 billion.
The increase in capital bases came days after the CBN’s Monetary Policy Committee (MPC) meeting.
In the meeting, CBN governor Yemi Cardoso urged Nigerian banks to expedite action on recapitalising their capital base to strengthen the financial system.
Meanwhile, a circular signed by Haruna Mustafa, CBN’s director of the Financial Policy and Regulation Department, said all banks must meet the new minimum capital requirement within 24 months commencing April 1, 2024, and terminating March 31, 2026.
According to the circular, the recapitalisation will enhance banks’ resilience, solvency, and capacity to continue supporting the growth of the Nigerian economy.
CBN urged banks to consider injecting fresh equity capital through private placements, rights issues, and subscription offers to meet the new minimum capital requirements.
The regulatory bank suggested mergers and acquisitions and upgrades or downgrades of licence authorisation. It said the minimum capital will comprise paid-up capital and share premium only.
The circular explained that the new capital requirement should not be based on the shareholders’ fund and additional Tier 1 (AT1) capital “shall not be eligible” for meeting the new requirement.
It added, “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.”
The minimum capital requirement for proposed banks should be paid-up capital, and the new minimum capital requirement should apply to all new applications for banking licences submitted after April 1, the CBN circular 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,” the circular stressed.
It pointed out that all banks must submit an implementation plan no later than April 30, clearly indicating the chosen options for meeting the new capital requirement and various activities involved with their timelines.
