CBN establishes new minimum capital base for banks, sets deadline

On Thursday, the Central Bank of Nigeria (CBN) introduced a new minimum capital base for banks.

According to the CBN, the new minimum capital base for commercial banks with international authorization is N500 billion.

Haruna Mustafa, Director of the Financial Policy and Regulation Department, issued a circular to all commercial, merchant, and non-interest banks, as well as promoters of proposed banks, emphasising that all banks must meet the minimum capital requirement within 24 months, beginning April 1, 2024 and ending March 31, 2026.

Hakama Sidi Ali, CBN spokesperson, confirmed the development in Abuja on Thursday.

According to Ali, the new minimum capital base for commercial banks with national authorisation is N200 billion, while the new need for institutions with regional authorisation is N50 billion.

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The apex bank also disclosed 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.

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The circular

The announcement comes just days after CBN Governor, Olayemi Cardoso, urged deposit money banks to expedite action on the recapitalisation of their capital base in order to strengthen the financial system.

Last November, Cardoso, who assumed office two months earlier, had said commercial banks in the country would be directed to increase their capital base to service a $1 trillion economy ambition of the President Bola Tinubu administration.

The last time the CBN increased capital base for banks was in 2005, when the current Anambra State Governor, Charles Soludo, was the apex bank chief. Capital base was raised from ₦2bn to ₦25bn.

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