The Central Bank of Nigeria (CBN) has cautioned banks against sourcing capital from illegitimate channels as they work to meet new capital requirements under the ongoing recapitalisation programme.
The move, the apex bank said, is aimed at safeguarding financial system integrity while strengthening the banking sector’s capacity to support Nigeria’s economic aspirations.
The warning was issued during the 36th Finance Correspondents and Business Editors seminar in Abuja, where CBN officials addressed key stakeholders in the financial ecosystem. Olubukola Akinwunmi, Director of Banking Supervision, underscored the importance of transparency in the capital-raising process, noting that any funds sourced through unlawful or opaque means could undermine the stability of the entire banking system.
According to Akinwunmi, the recapitalisation exercise announced in March and effective from April 1, 2024 is not only a response to domestic economic challenges but also a proactive measure to position Nigerian banks for global competitiveness. The programme is set to run until March 31, 2026.
Under the new requirements, banks are expected to significantly boost their capital bases. International banks must raise a minimum of ₦500 billion, national banks ₦200 billion, and regional banks ₦50 billion. For non-interest financial institutions, the new thresholds are ₦20 billion for national and ₦10 billion for regional operations.
Akinwunmi explained that the new capital regime is already in effect for new banking licence applications, and banks can explore various funding options including rights issues, mergers, acquisitions, and foreign strategic investments. He added that institutions can also opt to downgrade their licence category if necessary, without losing regulatory recognition.
He noted that stronger capital bases will equip banks to handle future economic shocks, support infrastructure and manufacturing, and provide greater financing to small and medium enterprises. He also highlighted that better capital positions would naturally lead to improved governance, investor confidence, and stricter compliance with anti-money laundering laws.
Reaffirming the sector’s resilience, Akinwunmi said that recent assessments showed Nigerian banks were performing well in terms of capital adequacy, liquidity, and asset quality. However, he warned that ensuring the legitimacy of new capital was non-negotiable.
Also speaking at the seminar, CBN Deputy Governor, Emem Usoro, emphasised that Nigeria’s ambition to grow its economy to $1 trillion by 2030 depends heavily on a well-capitalised, stable banking system. She described the recapitalisation push as a critical response to evolving global financial dynamics, noting that similar reforms in 2004 had reduced the number of banks and fortified the sector against future crises.
Usoro stressed that the current drive goes beyond merely raising funds it is about preparing the financial system to mobilise capital for national development and improving the sector’s ability to compete globally. She called for collaboration among policymakers, financial institutions, and the media to ensure the success of the reform.
Delivering a private sector perspective, the Group Managing Director of United Bank for Africa (UBA), Oliver Alawuba, said Nigeria must achieve double-digit economic growth to meet its $1 trillion GDP goal. At a growth rate of 3.84 per cent, he warned, the target would remain elusive.
Alawuba pointed to countries like Rwanda, Kenya, and Côte d’Ivoire as examples of African nations achieving higher growth through targeted economic reforms. He praised the CBN’s recapitalisation policy, stating that it would further position Nigerian banks to drive inclusive development, absorb macroeconomic shocks, and foster innovation.
He also urged stronger collaboration between banks and government agencies to address longstanding issues such as infrastructure deficits, financial exclusion, and security threats. He called for clear and consistent policies that would inspire investor confidence and unlock growth across key sectors.
Alawuba identified several challenges that continue to slow economic progress, including inflation, volatile exchange rates, and the high cost of doing business. He warned that unless financial inclusion is expanded especially in rural communities the broader economy would remain underdeveloped.
Touching on cybersecurity, the UBA chief revealed that Nigerian banks lost more than ₦42 billion to cyber fraud in 2023 alone. He urged joint efforts by financial institutions, regulators, and law enforcement to curb digital financial crimes and restore public trust.
As part of the recapitalisation roadmap, Alawuba said banks had already begun submitting their capital plans, with several making headway in raising the required funds. He clarified that the policy was not aimed at shrinking the number of banks but at ensuring that all financial institutions—big or small—are adequately positioned to contribute to economic growth.
In her remarks, Acting Director of Corporate Communications at the CBN, Sidi Ali Hakama, described the annual seminar as a crucial forum for building better understanding between financial regulators and the media. She reiterated the central bank’s commitment to transparency, accountability, and stakeholder engagement throughout the recapitalisation journey.
Hakama added that the CBN sees a strong banking sector as essential to achieving Nigeria’s economic transformation, and the current reforms are designed to deliver long-term financial system stability and prosperity.
