The Central Bank of Nigeria (CBN) has revealed plans to introduce a fresh round of banking recapitalisation for the Deposit Money Banks (DMBs).
Olayemi Cardoso, the CBN Governor, disclosed this during the 58th Annual Bankers’ Dinner hosted by the Chartered Institute of Bankers of Nigeria (CIBN) on Friday night in Lagos.
The proposed recapitalisation entails that DMBs will need to raise additional capital to align with the requirements of Nigeria’s economy.
Mr Cardoso highlighted that President Bola Ahmed Tinubu’s Policy Advisory Council report on the national economy had set an ambitious target of attaining a Gross Domestic Product (GDP) of one trillion dollars by 2030, with well-defined priority areas and strategies.
He emphasized the crucial role expected of banks in the envisioned one trillion dollars economy by 2030 and pointed out the necessity for their recapitalisation to fulfill this mandate.
Mr Cardoso expressed the imperative for Nigerian banks to play a substantial role in facilitating a more rapid and inclusive economic expansion to achieve the stipulated target.
He stressed the need to evaluate the sufficiency of the banking industry to cater to the envisaged expanded economy, considering the ongoing fiscal reforms and the projected economic growth.
The CBN Governor announced the approval of another round of Open Market Operations (OMOs) to absorb excess liquidity from the banking system.
OMOs serve as the primary monetary policy mechanism through which the central bank influences the money supply and interest rates by trading securities in the open market with financial institutions.
Mr Cardoso also unveiled that an additional OMO has been sanctioned to further diminish excess liquidity, offering Treasury Bills worth N108.1 billion with three tenors to the investing public, aimed at reducing liquidity in the banking system and supporting government fundraising.
He reiterated the commitment of the CBN to maintaining low and stable inflation through the effective use of monetary policy tools.
Furthermore, Mr Cardoso emphasized the CBN’s dedication to enhancing the efficacy of its monetary policy tools and fortifying the transmission mechanism to amplify the impact of its policy decisions on the economy.
He disclosed the CBN’s intent to revamp the country’s foreign exchange regulations by formulating new guidelines and legislation, with plans to engage banks and foreign exchange operators for input before finalizing the decisions.
It is evident that the CBN is resolute in its efforts towards achieving monetary and price stability, thus ensuring a favourable environment for the prosperity of businesses and individuals alike.
The actions being taken by the apex bank underscore its unwavering commitment to steering the Nigerian economy towards sustainable growth and stability.
