The Central Bank of Nigeria, CBN, says it forbids commercial banks from recapitalizing using illicit funds, saying this is necessary to preserve financial services stability.
According to the Yemi Cardoso-led CBN, the nation’s financial sector must remain strong enough to support the federal government’s plan for a $1 trillion economic projections.
The apex bank gave the warning on Monday at a sector event organised by the Finance Correspondents Association of Nigeria, FICAN, and Business Editors in Abuja, the nation’s capital.
Recall that President Bola Ahmed Tinubu had promised to ensure that the nation’s economy hits the trillion dollar mark by 2030.
Speaking at the event the Director of Banking Supervision at the CBN, Dr Olubukola Akinwunmi, said even though the recapitalisation exercise was designed to reposition the nation’s financial sector, in line with the federal government quest to enlarge the economy, the apex bank will ensure that the process is not compromised by deposit money banks operating in the country.
According to Akinwumi, the CBN will “ensure there is proper verification. And the verification is to ensure that we do not encourage illicit funds into our banking system. Illicit funds can only destabilise the banking system.”
He said the nation’s commercial bank have already passed Stress Test based on investigations conducted by the apex bank which showed that “our banks are on a strong footing. Our banks are standing on sound footing when it comes to liquidity, capital adequacy and non-performing loans.,” adding that DMB have been positioned to withstand any global shocks and headwinds.
“The recapitalisation is also about strengthening the financial system for the future. Larger capital bases translate to greater capacity to fund high-impact sectors such as infrastructure, manufacturing, and agriculture. Banks must be ready for the emerging global order.”
Under the CBN new recapitalisation guildelines which took effect from March 28, 2024, international commercial banks are expected to raise their minimum capital of N500 billion, while national commercial banks are to raise theirs to N200 billion.
Also, Regional Commercial and Merchant Banks are expected to recapitalise to the tune of N50 billion, while non-interest banks at the national and regional levels are to meet N20 billion and N10 billion recapitalisation.
The CBN had set March 31, 2026 as the deadlinefor all Deposit Money Bank and other financial institutions to fully recapitalise.
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