Preem & Partners | 28th March, 2024
The Central Bank of Nigeria (CBN), in a circular released and dated March 28, 2024, reviewed upwards the minimum capital requirement for commercial, merchant, and non-interest banks in Nigeria.
The circular has the mandated minimum capital requirement for commercial banks with international authorisation/license set at ₦500 billion, nationally-authorised/licensed commercial banks set at capital of ₦200 billion and regional commercial banks at ₦50 billion.
In the merchant banking sector, where only national licenses are issued, the national players are mandated to maintain a minimum capital of ₦50 billion.
For non-interest banks, which operate based on Islamic banking principles, national licensees are required to maintain a minimum capital of ₦20 billion, while regional licensees must have a minimum capital of ₦10 billion.
The mandate of the circular (that is, the review of banking sector’s minimum capital requirement) was made in line with section 9 of Banks and Other Financial Institutions Act (BOFIA), 2020. And going by the circular, the move aims to enhance the resilience, solvency, and capacity of Nigerian banks to support economic growth amidst prevailing macroeconomic challenges and headwinds occasioned by external and domestic shocks.
Existing commercial banks, merchant and non-interest banks have until March 31, 2026, to meet this requirement (a period of 24 months from April 1, 2024). However, the new share capital requirements will be applicable for new banking license applications submitted from April 1, 2024.
