NIGERIAN BANKS SUBMITTING RECAPITALISATION PLANS, CENTRAL BANK SAYS
Nigerian banks have started submitting their plans to meet the new minimum capital requirements set by the Central Bank of Nigeria (CBN) to enhance the financial system and support economic growth. This comes after the CBN raised the capital requirements in March.
NEW CAPITAL REQUIREMENTS
Under the new rules, commercial banks with international authorization must have at least 500 billion naira ($344.83 million) in capital. Over 20 lenders in Nigeria need to raise additional capital within two years to comply with this new threshold.
Hakama Sidi Ali, the central bank's spokesperson, stated, "Our banks have begun submitting implementation plans for the banking sector recapitalisation programme in compliance with the CBN Circular reviewing the minimum capital requirements for commercial, merchant, and non-interest banks." These plans are currently being reviewed by the CBN.
RECENT DEVELOPMENTS
Three top-tier Nigerian banks, Guaranty Trust Holding Plc, Access Corp, and FBN Holdings, have recently announced plans to raise capital. The central bank has emphasized the need for extra buffers due to significant devaluations of the local naira currency and the country's high inflation and low growth, which have persisted for over a decade.
ECONOMIC CONTEXT
The Nigerian economy has been struggling with high inflation and slow growth. Government measures to boost growth have led to increased prices, triggered rate hikes, and exacerbated a cost-of-living crisis. Labour unions recently suspended a strike over new minimum wage negotiations but have warned that the strike will resume if no agreement is reached within a week.
REGULATORY ACTIONS
The central bank revoked the license of Heritage Bank Plc for breaching regulations but refuted media speculation about doing the same with three other lenders.
Nigerian banks have started submitting their plans to meet the new minimum capital requirements set by the Central Bank of Nigeria (CBN) to enhance the financial system and support economic growth. This comes after the CBN raised the capital requirements in March.
NEW CAPITAL REQUIREMENTS
Under the new rules, commercial banks with international authorization must have at least 500 billion naira ($344.83 million) in capital. Over 20 lenders in Nigeria need to raise additional capital within two years to comply with this new threshold.
Hakama Sidi Ali, the central bank's spokesperson, stated, "Our banks have begun submitting implementation plans for the banking sector recapitalisation programme in compliance with the CBN Circular reviewing the minimum capital requirements for commercial, merchant, and non-interest banks." These plans are currently being reviewed by the CBN.
RECENT DEVELOPMENTS
Three top-tier Nigerian banks, Guaranty Trust Holding Plc, Access Corp, and FBN Holdings, have recently announced plans to raise capital. The central bank has emphasized the need for extra buffers due to significant devaluations of the local naira currency and the country's high inflation and low growth, which have persisted for over a decade.
ECONOMIC CONTEXT
The Nigerian economy has been struggling with high inflation and slow growth. Government measures to boost growth have led to increased prices, triggered rate hikes, and exacerbated a cost-of-living crisis. Labour unions recently suspended a strike over new minimum wage negotiations but have warned that the strike will resume if no agreement is reached within a week.
REGULATORY ACTIONS
The central bank revoked the license of Heritage Bank Plc for breaching regulations but refuted media speculation about doing the same with three other lenders.