Abuja, March 27, 2024 – The Central Bank of Nigeria (CBN) has advised Nigerian banks to increase of their capital base to strengthen them against potential risks.
Olayemi Cardoso, the apex bank governor, gave the advice on Tuesday while addressing journalists on outcome of the Monetary Policy Committee (MPC).
He said the MPC examined developments in the banking sector and noted that industry remained safe, sound, and stable.
The CBN governor, however, said that the was the need for the banks to recapitalise to guard against potential risks.
“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-potential guidelines.
“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”
Cardoso, had earlier in 2023, announced plans by the apex bank to carry out banking recapitalisation exercise.
He said there was the need for banks to recapitalise in view of the ambitious target of a $1 trillion Gross Domestic Product (GDP) economy being targeted by President Tinubu by 2030.
Cardoso said the banks needed to recapitalise if they were to play the development role envisioned for them in a $1 trillion economy.
The last banking recapitalisation exercise in Nigeria was done in 20025 when CBN Governor Chukwemeka Soludo ordered the banks to recapitalise to the tune of N25 billion from their N2 billion capital base.
During the exercise, some banks had to acquire less financially stable ones, while some had to merge which reduced the numbers of banks in the country then. (GBN)
