The Central Bank of Nigeria (CBN) has taken a significant step towards strengthening the country’s financial system by unveiling new minimum capital requirements for banks. In a move aimed at enhancing banks’ resilience and capacity to support the growth of the Nigerian economy, the CBN has set the minimum capital base for commercial banks with international authorization at N500 Billion.

This announcement, made by the Acting Director of the Corporate Communications Department, Mrs. Hakama Sidi Ali, also revealed that the minimum capital base for commercial banks with national authorization is now N200 Billion, while those with regional authorization must have a minimum capital base of N50 Billion. Additionally, merchant banks are required to have a minimum capital of N50 Billion, while non-interest banks with national and regional authorizations must have N20 Billion and N10 Billion, respectively.

All banks are required to meet these new minimum capital requirements within 24 months, starting from April 1, 2024, and ending on March 31, 2026. To achieve this, banks are encouraged to consider various options such as injecting fresh equity capital through private placements, rights issues, or offers for subscription, as well as engaging in mergers and acquisitions or upgrading/downgrading their license authorization.

It is important to note that the minimum capital shall consist of paid-up capital and share premium only, with Additional Tier 1 (AT1) Capital not eligible for meeting the new requirement. Banks that fail to meet the minimum capital adequacy ratio (CAR) requirement will be required to inject fresh capital to rectify the situation.

For proposed banks, the minimum capital requirement shall be paid-up capital, and this new requirement will apply to all new applications for banking licenses submitted after April 1, 2024. The CBN will continue to process pending applications for banking licenses, with promoters of proposed banks required to make up the difference between the capital deposited with the CBN and the new capital requirement by March 31, 2026.

All banks are mandated to submit an implementation plan outlining how they plan to meet the new capital requirement by April 30, 2024. The CBN will closely monitor and ensure compliance with these new requirements within the specified timeline, emphasizing the importance of a strong and stable financial system for the Nigerian economy’s growth.