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Nigeria’s Deposit Money Banks are increasing efforts to raise fresh capital as the Central Bank of Nigeria intensifies its oversight to build a stronger, more resilient financial system. The apex bank, led by Governor Olayemi Cardoso, is reinforcing governance, transparency, and risk management standards to ensure the sector remains stable amid emerging threats and economic pressure.
The banking system has continued to show resilience, with the Monetary Policy Committee reaffirming that financial institutions remain broadly safe and sound. At the 303rd MPC meeting held in Abuja, members expressed satisfaction with the sector’s performance, noting that most key financial soundness indicators still fall within regulatory limits. They commended the ongoing recapitalisation exercise and urged the CBN to ensure it is successfully completed.
Governor Cardoso explained that the apex bank remains alert to risks such as cyber threats, credit-concentration challenges, and operational weaknesses. He said these issues are being addressed through strengthened risk-based supervision and the ongoing transition to Basel III standards, which are designed to improve capital quality, enhance sector resilience, and strengthen liquidity monitoring. According to him, these efforts are key to supporting Nigeria’s long-term financial stability.
With less than four months left before the recapitalisation deadline of 31 March 2026, the Governor confirmed that progress across the banking industry has been steady. Speaking at the Bankers’ Dinner in Lagos, he said 27 banks have already raised capital through rights issues and public offers, while 16 banks have fully met or surpassed the new capital thresholds.
“To date, 27 banks have raised capital, and sixteen have already met or exceeded the new requirements, a clear testament to the depth and capacity of Nigeria’s banking sector,” Cardoso said. He added that stress tests conducted during the year showed that the banking system remains fundamentally robust and continues to meet major prudential benchmarks.
To protect the estimated N4.14tn in new capital expected to be raised before the exercise ends, the CBN is redesigning its credit-risk framework. Cardoso said the apex bank is enforcing stronger governance, transparency, and accountability in the sector. He revealed that the newly established Compliance Department is fully operational and now supervises financial crime compliance, market conduct, enterprise security, corporate governance, and environmental and social standards.
The CBN has upgraded the Credit Risk Management System into a web-enabled platform that banks can access for borrower checks and statutory reporting. It is also being integrated with internal systems across banks to streamline operations. These controls, Cardoso said, will prevent mismanagement and help break the recurring cycles of boom and bust that have accompanied past recapitalisation efforts.
A Deloitte report titled “Nigeria’s macro headwinds trigger bank recapitalisation” estimates that banks will raise about N4.14tn before the March 2026 deadline. The report explained that the rise in capital requirements—from N50bn to N500bn depending on licence type—is necessary to help banks withstand inflation, high interest rates, volatile exchange rates, and forex shortages. It added that higher capital will strengthen the ability of banks to absorb shocks and support larger transactions.
The CBN is also tightening operational discipline to ensure that banking services remain efficient for Nigerians. Cardoso said the bank conducted a full review of the cash management system—covering production, distribution, and cash access. This has led to new measures such as recalibrating the cash-printing model, issuing ATM-to-card ratio guidelines, sanctioning banks whose ATMs fail to dispense cash, and strengthening regulations for POS operators nationwide.
These reforms, the Governor noted, align with the government’s ambition to build a $1tn economy by 2030. He said banks must be sufficiently capitalised to finance the level of investment needed in a fast-growing economy. “Will Nigerian banks have sufficient capital relative to the financial system’s needs in servicing a $1tn economy? The answer is ‘No’ unless we take action,” he said.
The recapitalisation programme began on 1 April 2024 after the CBN announced new minimum capital levels for commercial, merchant, and non-interest banks. The new requirements include N500bn for commercial banks with international licences, N200bn for national banks, and N50bn for regional banks. Merchant banks must hold N50bn, while non-interest banks must hold between N10bn and N20bn depending on their licence category. The new definition of minimum capital—limited to paid-up capital and share premium—means banks cannot use retained earnings or reserves to meet the threshold.
CBN Deputy Governor, Corporate Services, Ms Emem Usoro, stressed that recapitalisation is crucial to financing a larger economy. She explained that banks must be equipped to support MSMEs, expand digital services, and invest in innovation. United Bank for Africa Group Managing Director, Mr Oliver Alawuba, also described the exercise as timely, adding that it will help banks withstand economic shocks and strengthen capacity to fund infrastructure.
Analysts say financial system stability is essential to maintain public confidence, protect savings, sustain investment, and ensure smooth monetary policy transmission. The CBN Act of 2007 mandates the bank to promote a safe, stable financial system, and over the years the apex bank has introduced reforms to ensure banking stability and strengthen governance.
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