CAPITALISATION: BANKS ENLIST WORKERS TO BOOST CAPITAL BASE
Summary:
- Context: To meet Central Bank of Nigeria (CBN) recapitalisation requirements, Deposit Money Banks have mobilized employees to help increase their capital base.
Details:
1. Employee Targets:
- Bank employees have been given financial targets to raise capital by encouraging new account openings, reactivating old accounts, and increasing deposits.
- The approach includes all staff levels, including IT and operations personnel, as banks struggle to access sufficient funds from capital markets.
2. Implementation:
- Private limited banks are using this internal method due to difficulties in raising funds through public markets.
- For example, Union Bank set a target of N50 billion, while Sterling Bank focuses on reactivating dormant accounts.
3. Challenges and Incentives:
- Workers face high targets, but incentives are provided to motivate participation.
- Some lower-level staff, lacking high-net-worth contacts, have opted out, while others see it as an opportunity to earn additional income.
4. Broader Strategies:
- Banks are also employing social media and influencers to reach potential customers.
- The CBN has mandated increased capital bases for various bank categories, with deadlines for meeting the requirements from April 2024 to March 2026.
5. Regulatory Perspective:
- The CBN’s directive includes raising capital through internal and external methods, mergers, acquisitions, and license changes.
- The SEC is overseeing compliance with the recapitalisation process, ensuring adherence to guidelines.
Related News:
- CAC issues guidelines for bank recapitalisation.
- Banks target $3 billion fund in foreign capital markets.
- Recapitalisation's impact on citizen engagement.
Commentary:
- Olusoji Oluwole of the Association of Senior Staff of Banks, Insurance, and Financial Institutions supports the targets but cautions against unrealistic goals.
Background:
- Recapitalisation aims to enhance financial stability, improve lending capacity, and support sustainable economic growth.
Summary:
- Context: To meet Central Bank of Nigeria (CBN) recapitalisation requirements, Deposit Money Banks have mobilized employees to help increase their capital base.
Details:
1. Employee Targets:
- Bank employees have been given financial targets to raise capital by encouraging new account openings, reactivating old accounts, and increasing deposits.
- The approach includes all staff levels, including IT and operations personnel, as banks struggle to access sufficient funds from capital markets.
2. Implementation:
- Private limited banks are using this internal method due to difficulties in raising funds through public markets.
- For example, Union Bank set a target of N50 billion, while Sterling Bank focuses on reactivating dormant accounts.
3. Challenges and Incentives:
- Workers face high targets, but incentives are provided to motivate participation.
- Some lower-level staff, lacking high-net-worth contacts, have opted out, while others see it as an opportunity to earn additional income.
4. Broader Strategies:
- Banks are also employing social media and influencers to reach potential customers.
- The CBN has mandated increased capital bases for various bank categories, with deadlines for meeting the requirements from April 2024 to March 2026.
5. Regulatory Perspective:
- The CBN’s directive includes raising capital through internal and external methods, mergers, acquisitions, and license changes.
- The SEC is overseeing compliance with the recapitalisation process, ensuring adherence to guidelines.
Related News:
- CAC issues guidelines for bank recapitalisation.
- Banks target $3 billion fund in foreign capital markets.
- Recapitalisation's impact on citizen engagement.
Commentary:
- Olusoji Oluwole of the Association of Senior Staff of Banks, Insurance, and Financial Institutions supports the targets but cautions against unrealistic goals.
Background:
- Recapitalisation aims to enhance financial stability, improve lending capacity, and support sustainable economic growth.