CBN Urges Banks to Expedite Recapitalization Efforts

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Olayemi Cardoso, speaking at the Central Bank of Nigeria’s 294th Monetary Policy Committee meeting in Abuja on Tuesday, has emphasized the need for Nigerian banks to expedite their recapitalization processes.

The directive comes as part of efforts to safeguard against potential risks in the banking sector. The current minimum capital requirement stands at ₦25 billion, and Cardoso urged banks to accelerate their efforts to meet or exceed this threshold.

During the MPC meeting, the CBN Governor, Olayemi Cardoso, announced an increase in the interest rate from 22.75% to 24.75%.

Meanwhile,the committee expressed satisfaction with the stability of the banking industry. However, to further mitigate risks, commercial banks are urged to prioritize their recapitalization initiatives.

According to Cardoso,The MPC emphasized the necessity for ongoing surveillance and compliance with regulatory guidelines to sustain the industry’s stability. Additionally, banks are urged to enhance their resilience against potential globalized risks through timely recapitalization.

Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.”

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“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”
Last November, Cardoso outlined plans for directing commercial banks to raise their capital base, aligning with the ambition of Nigeria’s $1 trillion economy initiative under President Bola Tinubu’s administration.

However,The last revision of capital requirements for banks occurred in 2005 under the leadership of former CBN Governor Charles Soludo. During that period, the minimum capital base was raised from ₦2 billion to ₦25 billion.

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