Merger looms as CBN increases capital requirements for Nigerian banks

Bank mergers are imminent as the Central Bank of Nigeria (CBN) has increased the minimum capital requirements for banks.

The CBN disclosed this in a circular signed by Haruna Mustafa, Director-General, Monetary Policy and Regulation, and issued to all commercial, merchant and interest-free banks.

The bank fixed the minimum capital base for internationally licensed commercial banks at NOK 500 billion, up from NOK 50 billion in 2005.

The CBN also has the lowest of the following banks: National Spread (200 billion Naira), Local Banks (50 billion Naira), Merchant Banks (50 billion Naira), National Interest Free Bank (20 billion Naira), Regional Interest Free Bank (10 billion Naira). Benchmarked capital requirements.

All banks must meet minimum capital requirements within 24 months from April 1, 2024 to March 31, 2026.

“The pervasive macroeconomic challenges and headwinds caused by internal and external shocks are preventing banks from raising adequate capital to strengthen their resilience, solvency and capacity to continue to support the growth of the Nigerian economy. It highlights the need to maintain.

“Consequently, in furtherance of its statutory responsibility to promote a safe, sound and stable banking system, and under section 9 of the Banks and Other Financial Institutions Act, 2020 (BOFIA), the Central Bank of Nigeria (CBN) We now announce the following: “Upward revision of the minimum capital requirements for commercial, merchant and non-interest-bearing banks in Nigeria,'' the circular reads in part.

DAILY POST recalls that in 2005 the required capital for an international banking license was NOK 50 billion. And the minimum capital requirement for the National Bank was 25 billion naira.

Source: dailypost.ng