The Central Bank of Nigeria (CBN) has announced a tenfold increase in the minimum capital requirements for lenders.
The new regulations, unveiled by the Abuja-based institution, dictate that banks operating internationally must now possess a minimum capital of 500 billion naira ($359 million), up from the previous requirement of 50 billion naira.
Similarly, banks with operations within the country are mandated to have a minimum capital of 200 billion naira, a significant leap from the former 25 billion naira threshold.
This sweeping reform underscores the CBN’s determination to enhance the resilience and solvency of Nigeria’s financial institutions in the face of daunting economic challenges.
With a struggling naira, soaring inflation, and a weakened economy, the banking sector has come under increasing pressure to adapt and strengthen its defenses against volatility.
Governor Olayemi Cardoso, who assumed office in September, has been vocal about the imperative for banks to shore up their balance sheets.
The directive, issued as part of broader fiscal and monetary reforms, comes at a critical juncture as Nigeria seeks to revitalize its economy and stimulate growth.
While these measures are aimed at safeguarding the stability of the banking sector, they also reflect the CBN’s proactive approach in addressing vulnerabilities and ensuring the long-term viability of Nigeria’s financial landscape.
As banks prepare to comply with the new regulations within the stipulated 24-month timeline, the impact of these reforms on the economy and the banking industry’s future trajectory remains to be seen.