CBN Sets Strict Guidelines for Banks Raising Capital, Warns Against Illicit Funds
- Nigerian banks are racing against the clock to meet new recapitalisation targets by March 2026
- Amid this race, the CBN has issued a warning against accepting illicit funds during the capital-raising process
- The CBN has also shared details about the steps it would take to ensure the banks comply with the guidelines
Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.
To meet the recapitalisation target before the deadline, Nigerian banks have been sourcing capital from various avenues, including rights issues and private placements.
The Central Bank of Nigeria (CBN) has warned Deposit Money Banks (DMBs) to carefully vet the sources of funds they accept during capital raising, emphasizing that introducing illicit funds into the financial system could undermine stability and threaten Nigeria's $1 trillion economic goal.
The Director of Banking Supervision at the CBN, Dr. Olubukola Akinwunmi, stated this at the 36th Finance Correspondents Association of Nigeria and Business Editors seminar in Abuja on Monday.
Source: UGC
Akinwunmi emphasized that the CBN would conduct thorough checks to ensure illicit funds do not enter the financial system.
CBN releases new capital threshold, deadline
Recall that the Central Bank of Nigeria raised minimum capital requirements for all banks in March 2024, with a two-year deadline set for March 31, 2026.
- International commercial banks have to raise their capital to N500 billion
- National commercial banks have to raise a minimum capital of N200 billion.
- Regional commercial banks and merchant banks have a N50 billion target as their minimum capital threshold.
- Non-interest banks are also required to raise N20 billion and N10 billion for the national and regional levels.
- For those applying for new banking licenses, the new minimum capital already applies to them.
Akinwunmi stated that the key indicators show a resilient banking sector in Nigeria, especially with regards to capital adequacy, liquidity, and non-performing loans, and the recapitalisation exercise would create a banking sector that is better shielded against global shocks and economic uncertainties.
He said;
“The recapitalisation is also about strengthening the financial system for the future. Larger capital bases translate to greater capacity to fund high-impact sectors such as infrastructure, manufacturing, and agriculture. Banks must be ready for the emerging global order.”
Akinwunmi added that the banks had a wide range of options to explore in raising capital, including public offers, mergers and acquisitions, rights issues, and strategic investments from outside the country.
Some banks may downgrade license
Legit.ng stated in an earlier report that some banks were likely to downgrade their banking license due to their inability to meet the minimum capital requirement before the deadline.
Akinwunmi, in his remarks, noted that banks that choose to scale down would not lose their regulatory standing.
He added that the additional investors on board would even increase transparency and compliance of the banks with anti-money laundering and terrorism financing laws, the PUNCH reports.
Source: Getty Images
Recapitalisation will stabilise the banking sector - Usoro
While delivering the keynote address at the seminar, Deputy Governor of CBN, Ms. Emem Usoro, noted that the recapitalisation exercise came as a policy response to changes in the global financial landscape.
She stressed that it would enhance the bank’s capacity to compete globally and to fund and power the $1 trillion economy Nigeria aims to achieve by 2030.
Referencing the 2004 recapitalisation exercise, Usoro explained the exercise may reduce the number of banks but would stabilise the sector and make the financial system more resilient to support development financing.
Access, GT, Zenith, 4 others raise N1.3 trillion
In related news, about seven Nigerian banks are on track to meet the March 2026 recapitalisation deadline set by the Central Bank of Nigeria (CBN).
The banks include Access Bank, Guaranty Trust Bank, Zenith Bank, FMCB, Sterling and Wema Bank, while UBA and Fidelity will announce their results later.
However, smaller banks are shunning public offerings, choosing alternative platforms to raise the required capital.
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Source: Legit.ng
