Central Bank of Nigeria(CBN) Increases Commercial Banks’ Capital Base to N500 Billion

The Central Bank of Nigeria (CBN) has announced new minimum capital requirements for banks.

The minimum capital base for commercial banks with international authorization has been set at N500 billion, while those with national authorization must have a minimum capital base of N200 billion, and banks with regional authorization must have a minimum of N50 billion.

Merchant banks are required to have a minimum capital base of N50 billion, while non-interest banks with national and regional authorizations must have minimum capital bases of N20 billion and N10 billion, respectively.

The directive, issued by the Acting Director of the Corporate Communications Department, Mrs. Sidi Ali, emphasizes that all banks must meet these new minimum capital requirements within 24 months, starting from April 1, 2024, and ending on March 31, 2026.

To facilitate compliance, banks are urged to consider various options, including injecting fresh equity capital through private placements, rights issues, or offers for subscription, as well as mergers and acquisitions or upgrading/downgrading license authorization.

The CBN circular specifies that the minimum capital requirement shall comprise paid-up capital and share premium only, excluding Additional Tier 1 Capital. Banks are also reminded to maintain compliance with minimum capital adequacy ratio requirements applicable to their license authorization.

For proposed banks, the minimum capital requirement shall be paid-up capital, effective for all new applications submitted after April 1, 2024.

The CBN will continue processing pending applications, with promoters required to bridge any gap between the deposited capital and the new requirement by March 31, 2026.

Banks are mandated to submit an implementation plan outlining their chosen options for meeting the new capital requirement by April 30, 2024.

The CBN will monitor and ensure compliance with these new requirements within the specified timeline.