BY GODWIN IJEDIOGOR
THE Central Bank of Nigeria (CBN) has increased the minimum capital requirement for Deposit Money Banks (DMBs) with national licences from N25billion to N200billion.
It also raised capital requirement for banks with regional licences from N15billion to N50billion and those with international licences from N100billion to N500billion.
A statement issued by the apex bank’s Acting Director, Corporate Communications Department, Mrs. Hakama Sidi-Ali, said the new minimum capital for merchant banks would be N50billion, while non-interest banks with national and regional authorisations are N20billion and N10billion.
This came days after the Monetary Policy Committee (MPC) meeting, where the CBN Governor, Yemi Cardoso, urged Nigerian banks to expedite action on the recapitalisation of their capital base to strengthen the financial system.
Meanwhile, a circular signed by the bank’s Director, Financial Policy and Regulation Department, Mr. Haruna Mustafa, said all banks were required to meet the new minimum capital requirement within 24 months (two years) commencing from April 1 and terminating on March 31, 2026.
This, he stated, is to enhance banks’ resilience, solvency and capacity to continue supporting the growth of the Nigerian economy, urging banks to consider injecting fresh equity capital through private placements, rights issues and offers for subscription, as well as Mergers and Acquisitions (M&As) and upgrade or downgrade of licence authorisation to meet the new minimum capital requirements.
Mustafa said the minimum capital shall comprise paid-up capital and share premium only, noting: “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.”
He said that the minimum capital requirement for proposed banks shall be paid-up capital, adding that the new minimum capital requirement shall apply to all new applications for banking licences submitted after April 1.
“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,” he said
The CBN director stated that all banks were required to submit an implementation plan, clearly indicating the chosen options for meeting the new capital requirement and various activities involved with their timelines, nor later than April 30, explaining that the apex bank would monitor and ensure compliance with the new requirements within the specified time line.
