Economy

CBN sets ₦500bn as new minimum capital requirements for banks

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CBN sets ₦500bn as new minimum capital requirements for banks

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The Central Bank of Nigeria (CBN) has announced a significant change in the minimum capital requirements for banks, aiming to bolster the financial sector.

According to a circular issued by the Director of the Financial Policy and Regulation Department, Haruna Mustafa, commercial banks with international authorization must now maintain a minimum capital base of ₦500 billion.

This directive applies to all commercial, merchant, and non-interest banks, as well as promoters of proposed banks.

Banks are given a 24-month window, starting from April 1, 2024, to meet this requirement, ending on March 31, 2026.

CBN spokesperson Hakama Sidi Ali confirmed the development in Abuja, underlining the importance of these new regulations in ensuring the stability and resilience of Nigeria’s banking sector.

Under the new guidelines, commercial banks with national authorization must maintain a minimum capital base of ₦200 billion, while those with regional authorization are required to have ₦50 billion.

Similarly, the minimum capital for merchant banks has been set at ₦50 billion, and for non-interest banks with national and regional authorizations at ₦20 billion and ₦10 billion, respectively.

This announcement follows recent calls from CBN Governor Olayemi Cardoso for deposit money banks to expedite their capital base recapitalization efforts, aligning with the broader economic ambitions of the government.

Notably, this marks the first adjustment in capital requirements since 2005 when the CBN, under the leadership of Charles Soludo, increased the capital base from ₦2 billion to ₦25 billion.

This move underscores the evolving landscape of Nigeria’s financial sector and its ongoing efforts to adapt to changing economic realities and global standards.