In a bid to strengthen the financial sector and guard against potential risks, the Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite actions to increase their capital base from the current ₦25 billion.
This directive was issued by CBN Governor Olayemi Cardoso during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) held on Tuesday in Abuja. The MPC, during the meeting, decided to hike the interest rate by 22.75% to 24.75%.
Governor Cardoso emphasized that the MPC reviewed developments in the banking sector and expressed satisfaction with the industry’s stability. However, to ensure continued stability and resilience against potential risks, commercial banks in the country were urged to accelerate their recapitalization efforts.
Addressing the gathering, Cardoso stated, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-prudential guidelines.”
He further added, “The MPC also enjoined the banks to expedite actions on the recapitalization of banks to strengthen the system against potential risks in an increasingly globalized world.”
It is worth noting that last November, Governor Cardoso, who assumed office two months earlier, had indicated that commercial banks in Nigeria would be directed to increase their capital base to support the ambitious goal of achieving a $1 trillion economy set by the administration of President Bola Tinubu.
The last time the CBN increased the capital base for banks was in 2005, during the tenure of the current Anambra State Governor, Charles Soludo, when the capital base was raised from ₦2 billion to ₦25 billion.
