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CBN Directs Nigerian Banks to Increase Capital Base

he Central Bank of Nigeria has increased the capital base for various categories of banks in the country. Banks with international authorization now require a capital base of N500 billion, while national banks need N200 billion. Commercial banks with regional authorization are expected to have a capital base of N50 billion, and merchant banks must reach N50 billion as the minimum requirement. Non-interest banks with national and regional authorizations are directed to raise their capital to N20 billion and N10 billion, respectively.

All banks must meet the new minimum capital requirement within 24 months, starting from April 1 and ending on March 31, 2026. This policy change aims to promote a safe and stable banking system in line with the Banks and Other Financial Institutions Act. The directive provides banks with options like seeking new equity capital, engaging in mergers and acquisitions, or adjusting their license authorization to meet the new capital requirements. Existing banks must ensure that their minimum capital comprises paid-up capital and share premium only, not based on shareholders’ funds. Additionally, additional Tier 1 capital does not qualify to fulfill the new requirement. Banks failing to meet the capital adequacy ratio will need to inject fresh capital to rectify their position.

New banking permit requests after April 1 must adhere to the updated minimum capital requirement, with banks required to submit an implementation plan by the end of the following month to the Director of Banking Supervision Department.

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