CBN Raises Minimum Capital Requirements for Banks: What You Need to Know

The Central Bank of Nigeria (CBN) has raised the Minimum Capital Requirements for Deposit Money Banks (DMBs) with national licenses from N25 billion to N200 billion.

The central bank has increased the capital requirement for banks with regional licenses from N15 billion to N50 billion, and for those with international licenses from N100 billion to N500 billion.

Merchant banks will now need a minimum capital of N50 billion, according to a statement by the Acting Director of the bank’s Corporate Communications Department, Mrs Hakama Sidi-Ali..

Sidi-Ali also announced that the new requirements for non-interest banks with national and regional authorisations are N20 billion and N10 billion.

The move is coming days after the Monetary Policy Committee (MPC) meeting.

The Apex Bank Governor, Yemi Cardoso had in the meeting, urged Nigerian banks to expedite action on the recapitalisation of their capital base to strengthen the financial system.

A circular signed by the Director, Financial Policy and Regulation Department, Mr Haruna Mustafa, said that all banks were required to meet the new minimum capital requirement within 24 months commencing from April 1 and terminating on March 31, 2026.

He noted that the move is to enhance banks’ resilience, solvency, and capacity to continue supporting the growth of the Nigerian economy.

Mustafa called banks to consider injecting fresh equity capital through private placements, rights issues and offers for subscriptions to meet the new minimum capital requirements.

He also suggested Mergers and Acquisitions (M&As); and upgrade or downgrade of licence authorisation.

He said that the minimum capital shall comprise paid-up capital and share premium only.

“The new capital requirement shall not be based on the shareholders’ fund.

“Additional Tier 1 (AT1) Capital shall not be eligible for meeting the new requirement.

” Notwithstanding the capital increase, banks are to ensure strict compliance with the minimum capital adequacy ratio (CAR) requirement applicable to their licence authorisation.

“In line with extant regulations, banks that breach the CAR requirement shall be required to inject fresh capital to regularise their position,” Mustafa said.

He stated that the minimum paid-up capital for proposed banks will be the new minimum capital requirement for all new banking license applications submitted after April 1.

“The CBN will continue to process all pending applications for banking licences for which a capital deposit had been made and an Approval-in-Principle (AIP) had been granted.

“However, the promoters of such proposed banks will make up the difference between the capital deposited with the CBN and the new capital requirement not later than March 31, 2026.,” he said

He said that all banks were required to submit an implementation plan, clearly indicating the chosen options for meeting the new capital requirement and various activities involved with their timelines, nor later than April 30.

He said the CBN will ensure compliance with new requirements.