Central Bank of Nigeria Establishes Minimum Capital Base Requirements for Banks

The Central Bank of Nigeria has introduced revised minimum capital requirements for banks in a move aimed at bolstering their resilience and fortifying the country’s financial system. Under these new regulations, commercial banks with international authorization must maintain a minimum capital base of 500 billion naira ($353.32 million). Similarly, banks with national authorization are mandated to uphold a minimum capital threshold of 200 billion naira, while those with regional authorization must maintain a minimum requirement of 50 billion naira.

To assist banks in meeting these heightened capital requirements, the central bank has suggested several avenues, including injecting fresh equity capital, engaging in mergers and acquisitions, and reassessing their license authorization status. Banks are provided with a two-year grace period to align themselves with the updated capital standards, as outlined in the official statement.

Nigeria is currently grappling with a staggering inflation rate exceeding 30% annually, marking the highest level in nearly three decades. This surge in inflation exacerbates a cost-of-living crisis, leaving millions of individuals across Africa’s most populous nation struggling to fulfill their basic needs. Against this backdrop, the central bank’s initiative to strengthen capital requirements seeks to enhance the stability and resilience of the banking sector, thereby contributing to overall financial stability in Nigeria.

By implementing these measures, the Central Bank of Nigeria aims to instill confidence in the financial system, mitigate risks, and foster sustainable economic growth. These regulatory adjustments are crucial steps towards safeguarding the integrity and stability of Nigeria’s banking sector amidst challenging economic conditions.