Breaking: CBN Pegs Banks’ Capital Bases at N500bn, N200bn

Nigerian commercial banks have a fresh hurdle to cross as the Central Bank of Nigeria (CBN) has introduced new capital bases for them

In a policy released Thursday, March 28, the minimum capital base for commercial banks with international authorisation now stands at N500 Billion, and commercial banks with national authorisation at N200 Billion.

A breakdown of the new capital bases, shows that for banks with regional authorisation, it is N50 Billion, moves which the apex bank has explained is to buoy up banks’ liquidity and strengthen the financial system.

Acting Director, Corporate Communications Department of the bank, Mrs. Hakama Sidi Ali who gave the figures added that the new minimum capital for merchant banks would be N50 Billion, while the new requirements for non-interest banks with national and regional authorisations are N20 Billion and N10 Billion, respectively

In addition, all banks are required to meet the minimum capital requirement within 24 months commencing from April 1, 2024, and terminating on March 31, 2026.

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A circular to the above, issued to all commercial, merchant, and non-interest banks and promoters of proposed banks emphasised was signed by the Director, Financial Policy and Regulation Department, Mr. Haruna Mustafa.

The  circular, referred to the address of the CBN Governor, Olayemi Cardoso, to the Annual Bankers’ Dinner in November 2023, explaining that the policy move in the interest of better banking,

According to it, the policy move on capital bases, is aimed at enhancing banks’ resilience, solvency, and capacity to continue supporting the growth of the Nigerian economy.

The apex bank advises banks to explore fund mobilisation opportunities like rights issues and/or offers for subscription, private placements,; Mergers and Acquisitions and upgrade or downgrade of license authorisation.

“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 license authorisation.

“In line with extant regulations, banks that breach the CAR requirement shall be required to inject fresh capital to regularise their position,” it added.

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The CBN circular said 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 licenses submitted after April 1, 2024.