CBN Proposes Banks to Raise Capital to 1 Trillion - A Step Forward for Financial Stability
The Central Bank of Nigeria (CBN) has proposed to raise the minimum capital base of banks operating in the country to one trillion Naira as part of a major step to ensure the robustness of the financial system. This move will help modernize the banking sector and increase the efficiency of the financial system. Find out more about the initiative and its potential benefits for Nigerians here.
The Central Bank of Nigeria (CBN) has indicated that banks in the country will be required to raise their capital base in order to support the government's $1 trillion economy. This was announced by the governor of the CBN, Yemi Cardoso, at the 58th Annual Bankers Dinner and the 60th anniversary of the Chartered Institute of Bankers of Nigeria (CIBN).
Cardoso stated that Nigerian banks currently do not have enough capital to support the needs of a $1 trillion economy in the near future. President Bola Tinubu has recently mentioned the possibility of Nigeria's economy reaching $1 trillion by 2026 and $3 trillion within 10 years.
He emphasized the importance of taking action to ensure that Nigerian banks have sufficient capital to meet the needs of the growing economy. As a first step, banks will be directed to increase their capital. Cardoso also addressed the previous government's foreign exchange restrictions on the importation of 43 items, stating that the CBN will be repositioned as a catalyst for change and economic development.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, commended the CIBN and stated that the government is committed to building a stable and resilient economy. He acknowledged that the decisions taken by the government may be difficult but are necessary to attract investment, create jobs, and reduce poverty.
The chairman of the Body of Banks' Chief Executive Officers and managing director of Zenith Bank, Ebenezer Onyeagwu, expressed support for the reforms introduced by the CBN. He mentioned that the CBN is already addressing the issue of FX forward and it will soon be resolved.
Ken Opara, the president of the Chartered Institute of Bankers of Nigeria, praised Cardoso for his initiatives in repositioning and stabilizing the economy. These initiatives include focusing on price and exchange rate stability, unifying the exchange rate, boosting liquidity in the foreign exchange market, and ensuring investors receive positive yields on their investments. The CBN has also issued an advisory notice in conjunction with the Financial Services Regulation Coordinating Committee.
