Business a.m
The Central Bank of Nigeria (CBN) has released new minimum capital requirements for banks, requiring commercial banks with international authorisation to have a minimum capital base of N500bn. The new capital requirements are part of the CBN's efforts to strengthen the banking sector and ensure that banks are well-capitalised to meet the needs of the Nigerian economy. The CBN,confirmed the development in a circular updated on its website recently, titled REVIEW OF MINIMUM CAPITAL REQUIREMENTS FOR COMMERCIAL,MERCHANT,AND NON-INTEREST BANKS IN NIGERIA. The statement, signed by Haruna Mustafa, the CBN director, financial policy and regulation department, stated that the current macroeconomic challenges and external and domestic shocks have made it imperative for banks to increase and maintain adequate capital levels, to ensure resilience and solvency. The CBN further explained that strong and resilient banks are crucial for promoting financial stability and supporting economic growth in Nigeria. The CBN cited its responsibility to promote a safe, sound, and stable banking system, as laid out in Section 9 of the Banks and Other Financial Institutions Act (BOFIA) 2020, as the basis for the upward review of the minimum capital requirements for commercial, merchant, and non-interest banks in Nigeria. The CBN circular raised the minimum capital requirement for banks with international authorisation from N50 billion to N500 billion, an increase of 900 per cent. The minimum capital requirement for commercial banks with national authorisation has been raised from N25 billion to N200 billion, an increase of 800 per cent. Banks with regional authorisation are now required to have a minimum capital of N50 billion, an increase of 400 per cent over the previous requirement of N10 billion. Meanwhile, the new minimum capital for non-interest banks with national authorisation was raised to N20 billion,while the minimum capital for non-interest banks with regional authorisation was raised to N10 billion. To facilitate compliance with the new minimum capital requirements, the CBN provided a number of options for banks. These include: 1.Injecting fresh equity capital through private placements, rights issue and/or offer for subscription.- Mergers and acquisitions (M&As)