The Central Financial institution of Nigeria (CBN), below the management of Olayemi Cardoso, has sustained its push to entrench regulatory excellence and strengthen the nation’s monetary system by way of an formidable financial institution recapitalisation programme.
With over 20 banks already assembly the brand new minimal capital necessities, the train highlights the regulator’s resolve to construct a stronger, extra resilient banking system able to supporting financial development and sustaining monetary stability.
Analysts observe that sturdy regulatory requirements are crucial to safeguarding Nigeria’s monetary ecosystem and aligning it with world greatest practices.
On the core of the continued recapitalisation drive is the target of strengthening banks by way of recent capital elevating, steadiness sheet restructuring, and improved governance frameworks. The emergence of bigger and stronger banks is extensively seen as one of the crucial vital advantages of the train, as better-capitalised establishments are extra able to absorbing shocks and financing long-term financial improvement.
For Cardoso, sustainable financial development can solely be achieved with robust assist from a sound and resilient monetary system. The CBN management believes the banking sector should be positioned to enhance authorities insurance policies aimed toward enterprise development and the long-term ambition of constructing a $1 trillion economic system. This considering has knowledgeable the apex financial institution’s dedication to align financial stability with broader fiscal and improvement priorities.
Central to this agenda is the CBN’s emphasis on compliance, governance, and efficient danger administration. Cardoso has persistently harassed that strengthening Nigeria’s monetary system goes past capital accumulation, requiring a deep-rooted tradition of compliance and accountability. The apex financial institution has subsequently reaffirmed its dedication to sustaining a clear and resilient monetary system by way of stricter regulatory oversight and enhanced danger administration throughout monetary establishments.
Milestones in recapitalisation
Forward of the March 31, 2026 deadline, Cardoso, in his most up-to-date public replace on the programme, disclosed that 16 banks had already met the brand new capital necessities, whereas 27 others have been actively elevating funds. Extra just lately, Muhammad Abdullahi, deputy governor, Financial Coverage, acknowledged at a Nigeria Financial Summit Group discussion board that not lower than 20 banks had now met the brand new thresholds.
Nigeria at present has 44 deposit-taking banks throughout totally different licence classes. Because the deadline approaches, at the least seven banks are reportedly weighing the choice of cutting down their licences from nationwide to regional, largely because of the geographic focus of their operations and the growing attain of digital banking companies throughout the nation.
One financial institution that at present holds a world banking licence additionally indicated just lately that it might scale all the way down to a nationwide licence within the instant interval earlier than the deadline, whereas persevering with recapitalisation efforts to strengthen its capital base and finally regain worldwide standing.
Beneath the CBN’s regulatory framework, banks are categorised into three broad licence sorts, worldwide, nationwide, and regional, based mostly largely on monetary power and operational scope. Past the capital-raising course of itself, banks are required to topic new fairness funds to rigorous capital verification earlier than remaining clearance, allotment approval, and the eventual recognition of funds as a part of their capital base.
The CBN serves as the ultimate signatory in a tripartite capital verification committee comprising the apex financial institution, the Securities and Alternate Fee (SEC), and the Nigeria Deposit Insurance coverage Company (NDIC). This committee is tasked with scrutinising funds raised below the recapitalisation programme to make sure transparency and compliance.
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New capital to hit N4.14 trillion
With complete new capital estimated at about N4.14 trillion and over 20 banks already assembly minimal necessities, 2026 is shaping as much as be a big milestone for Nigeria’s economic system. The CBN had introduced the two-year recapitalisation train on March 28, 2024, with implementation commencing on April 1, 2024. The programme requires minimal capital of N500 billion, N200 billion, and N50 billion for industrial banks with worldwide, nationwide, and regional licences respectively. The compliance window closes on March 31, 2026.
Cardoso has stated the apex financial institution will strictly implement stronger governance, better transparency, and firmer accountability to safeguard the funds raised. He disclosed that a number of banks have already exceeded the brand new thresholds, whereas others are progressing steadily and are nicely positioned to fulfill the deadline.
“Banks assembly or exceeding the brand new necessities is a transparent testomony to the depth, resilience, and capability of Nigeria’s banking sector,” Cardoso acknowledged.
As a part of broader reforms, the CBN has established a devoted Compliance Division, now absolutely operational, with obligations overlaying monetary crime supervision, market conduct, enterprise safety, company governance, and environmental, social, and governance rules.
In accordance with the CBN governor, the method of implementing stronger controls over raised funds is ongoing, with a redesigned credit-risk framework anticipated to make sure prudent deployment of latest capital. Up to now, post-recapitalisation liquidity typically led to aggressive risk-taking, elevating issues about mortgage high quality and asset deterioration.
To protect towards a repeat, Cardoso stated the apex financial institution is set to keep away from the boom-and-bust cycles which have characterised earlier recapitalisation workout routines. He famous that the web-enabled CBN Credit score Danger Administration System now permits banks and stakeholders to instantly entry borrower info, whereas ongoing integration with banks’ inside techniques is predicted to additional improve effectivity.
In a report titled ‘Nigeria’s Macro Headwinds Set off Financial institution Recapitalisation’, Deloitte estimated complete funds to be raised at N4.14 trillion, describing the upward overview of banks’ capital base as important to boosting capital adequacy within the face of inflation, rate of interest pressures, change charge volatility, and international change illiquidity. In accordance with the agency, stronger capital buffers will enable banks to tackle larger dangers, take in shocks, and enhance liquidity and loss-bearing capability.
Cardoso has repeatedly harassed that Nigeria’s banking system stays basically sound and resilient, even because the CBN stays vigilant towards rising dangers akin to cyber threats, credit score focus, and operational vulnerabilities. He famous that the continued transition to Basel III will additional strengthen capital high quality, liquidity administration, and resilience.
With simply months to the tip of the train, the CBN boss stated recapitalisation stays firmly on observe, including that current stress checks confirmed the robustness of the banking system, with key prudential indicators comfortably met.
Past capital, Cardoso stated the apex financial institution can also be reinforcing operational self-discipline to make sure the monetary system serves all Nigerians successfully. Measures embody reforms throughout the money lifecycle, pointers on optimum ATM-to-card ratios, stricter approval necessities for department or ATM closures, sanctions for poor money availability, and intensified supervision of fee brokers and POS operators nationwide.
He has additionally emphasised ethics and professionalism within the banking trade, noting that the CBN has adopted the FX International Code for all authorised sellers and market contributors. Surveillance has been intensified to remove dangerous actors and implement a zero-tolerance stance on compliance violations, whereas the Chartered Institute of Bankers of Nigeria has been urged to steer in upholding trade requirements.
Supporting the coverage, Oliver Alawuba, Group managing director of United Financial institution for Africa, described the recapitalisation drive as well timed and important. He stated it could strengthen the sector’s capacity to face up to shocks akin to inflation, forex volatility, and geopolitical disruptions, whereas positioning banks to finance Nigeria’s long-term financial transformation.
In accordance with Alawuba, the coverage goes past compliance and represents a forward-looking technique to equip banks to function on the scale required by a trillion-dollar economic system, supporting each conventional sectors akin to oil and fuel, agriculture, and manufacturing, in addition to rising areas together with fintech, inexperienced vitality, and infrastructure.
Cardoso has reiterated that key indicators, together with non-performing mortgage and liquidity ratios, stay inside prudential benchmarks, reinforcing confidence within the sector. He famous that many banks have already raised required capital nicely forward of schedule, placing the trade in a robust place to broaden credit score to MSMEs and assist funding in crucial sectors.
Because the recapitalisation deadline attracts nearer, the CBN’s technique factors to a banking system that’s not solely bigger, however extra disciplined, resilient, and able to powering Nigeria’s long-term financial ambitions.
