The Central Bank of Nigeria (CBN) has warned deposit money banks to avoid sourcing capital from illegitimate channels during the ongoing recapitalisation exercise. The apex bank emphasised that such actions could threaten the stability of the financial system.
Speaking during the 36th Finance Correspondents Association of Nigeria and Business Editors Seminar held in Abuja on Monday, the CBN’s Director of Banking Supervision, Dr. Olubukola Akinwunmi, said the bank would implement stringent verification processes to ensure all capital inflows are legitimate.
Akinwunmi explained that the CBN was committed to proper scrutiny, noting that the verification process was intended to prevent the introduction of illicit funds into the banking sector. He reportedly stated that illicit capital inflows could destabilise the financial system and undermine the goals of the recapitalisation exercise.
The recapitalisation initiative, which officially commenced on April 1, 2024, is expected to span 24 months. It is designed to boost the capacity of banks to support Nigeria’s ambition of becoming a $1 trillion economy.
Under the new capital framework, international commercial banks are required to raise their minimum capital base to ₦500 billion. National banks must meet a threshold of ₦200 billion, while regional banks are expected to attain ₦50 billion.
Akinwunmi also explained that beyond regulatory compliance, the recapitalisation programme is meant to equip the financial sector to handle both domestic and global economic challenges. He reportedly said the initiative was aimed at strengthening the financial system for the future, adding that banks with larger capital bases would be better positioned to support critical sectors such as infrastructure, manufacturing, and agriculture.
Also speaking at the event, the CBN Deputy Governor, Ms. Emem Usoro, highlighted the pivotal role of a strong banking sector in realising national economic goals. She was quoted as saying that the recapitalisation of banks was essential for powering economic growth and ensuring Nigeria could compete favourably with its global counterparts.
Usoro also described the initiative as a forward-looking measure, characterising it as a response to changing global financial dynamics and a necessary step toward building a resilient and competitive financial system.
The CBN reaffirmed that banks are permitted to pursue various strategies to meet the new capital requirements, including mergers, public offerings, and strategic foreign investments. However, it maintained that all processes must adhere to regulatory guidelines and uphold transparency.
