The Central Bank of Nigeria (CBN) has instructed the country’s deposit money banks to hasten the increase of their capital base from the current N25 billion.
This directive was announced by CBN Governor Olayemi Cardoso during the 294th Monetary Policy Committee (MPC) meeting in Abuja on Tuesday, where the MPC raised the interest rate from 22.75% to 24.75%.
The CBN head noted that the MPC reviewed the banking sector’s developments and was pleased with its stability.
Nonetheless, the committee advised that to mitigate risk, commercial banks should expedite their recapitalization processes.
Cardoso stated, “The MPC has also examined the banking system’s progress and observed that the sector remains secure, robust, and stable. Consequently, the committee has urged the bank to continue its oversight and ensure that banks adhere to the established regulatory and macro-prudential guidelines.”
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“The MPC further encouraged the banks to accelerate the recapitalization process to fortify the system against potential risks in an increasingly globalized world.”
In November last year, Cardoso, who took office two months prior, announced that commercial banks in the nation would be instructed to augment their capital base to support the $1 trillion economy goal of President Tinubu’s administration.
The previous increment in the capital base for banks by the CBN occurred in 2005 when the now Governor of Anambra State, Charles Soludo, was the head of the apex bank. The capital base was increased from N2 billion to N25 billion.
