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The Central Bank of Nigeria (CBN) has issued a strong advisory to deposit money banks, urging them to steer clear of illicit sources of funding as they pursue fresh capital under the ongoing recapitalisation programme. The caution forms part of broader efforts to preserve financial system stability, enforce regulatory compliance, and fortify the banking sector’s capacity to support Nigeria’s ambitious $1 trillion GDP target.
Speaking at the 36th Finance Correspondents Association of Nigeria (FICAN) and Business Editors Seminar in Abuja, Dr. Olubukola Akinwunmi, Director of Banking Supervision at the CBN, emphasized that the central bank is deploying a robust compliance assessment framework to verify the legitimacy of funds being raised during the capitalisation process.
“We are ensuring thorough verification of capital sources. The goal is to prevent destabilising the financial ecosystem through illicit funds,” Akinwunmi stated, highlighting the CBN’s commitment to risk mitigation and a secure financial environment.
The recapitalisation strategy, which commenced on April 1, 2024, introduces revised minimum capital requirements tailored to the operational scope of different banking categories. Under the new regulatory guidelines:
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International commercial banks must raise their capital base to ₦500 billion.
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National commercial banks are required to meet ₦200 billion.
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Regional commercial and merchant banks must each attain ₦50 billion.
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Non-interest banks are to comply with ₦20 billion (national) and ₦10 billion (regional) thresholds.
The 24-month compliance window will end on March 31, 2026, with the requirements already in effect for all new banking licence applications. According to Akinwunmi, the revised thresholds aim to address structural imbalances, enhance resilience, and empower banks to absorb macroeconomic shocks, both local and global.
“Our banks remain strong on key prudential indicators, including capital adequacy, liquidity ratios, and non-performing loan levels. This recapitalisation is about preparing for the future and aligning our compliance frameworks with international standards,” he added.
The CBN has outlined a phased approach to implementation, providing banks with multiple compliant funding options such as public offerings, rights issues, mergers, acquisitions, and strategic foreign direct investments. Banks may also downscale licence types without regulatory penalties, enhancing flexibility within the compliance management system.
Highlighting the corporate governance angle, Akinwunmi noted that stronger capital positions will attract more investors, increasing scrutiny and pushing for improved adherence to anti-money laundering (AML) and counter-terrorism financing (CTF) regulations.
He reaffirmed the apex bank’s return to the original definition of share capital—comprising only paid-up capital and share premium—as stipulated under the Banks and Other Financial Institutions Act (BOFIA), ensuring alignment with legal and regulatory reporting standards.
“This recapitalisation drive is instrumental in deepening financial inclusion, expanding credit access for SMEs, and increasing funding for high-impact sectors such as infrastructure, agriculture, and manufacturing,” Akinwunmi emphasized.
Delivering the keynote address, CBN Deputy Governor Ms. Emem Usoro underscored the importance of a well-capitalised banking sector to Nigeria’s economic transformation agenda. She described the initiative as a proactive response to evolving global financial dynamics.
“The last major recapitalisation in 2004 stabilised the industry. But today’s environment demands a more resilient, globally competitive, and innovation-driven banking sector,” Usoro stated.
She highlighted the need for sustained stakeholder support, clear regulatory communication, and strategic policy implementation to realise the full potential of the recapitalisation programme.
United Bank for Africa (UBA) Group Managing Director, Mr. Oliver Alawuba, further reinforced the urgency of structural reform. He noted that Nigeria must grow its economy at a minimum of 10% annually to meet the $1tn GDP vision—far above the current growth rate of 3.84%.
“With increasing regulatory change management needs and digital innovation across Africa, Nigerian banks must be empowered to support infrastructure, trade, and financial crime prevention effectively,” he said.
Alawuba applauded the CBN for launching a forward-looking recapitalisation initiative, not as a reaction to sectoral weaknesses, but as a growth strategy. He urged enhanced collaboration between regulators, financial institutions, and the media to drive financial literacy and confidence in the system.
However, he flagged critical challenges such as regulatory inconsistencies, infrastructural deficits, high inflation, and cybersecurity vulnerabilities. He disclosed that Nigerian banks lost over ₦42 billion to cyber fraud in 2023, calling for advanced fraud detection systems, inter-agency coordination, and stronger cyber resilience platforms.
“Our banks are capable of powering national development and even managing central bank reserves across Africa. But we must invest in compliance technology, secure platforms, and regulatory reforms that support inclusive growth,” he said.
On the recapitalisation’s progress, Alawuba confirmed that many banks have submitted capital plans and are already taking decisive steps to meet the new thresholds. He stressed that every tier of bank—from micro to mega—must be supported as each plays a unique role in the broader Governance, Risk, and Compliance (GRC) ecosystem.
In her welcome remarks, Acting Director of Corporate Communications at the CBN, Mrs. Sidi Ali Hakama, reiterated the apex bank’s commitment to enhancing public understanding through journalist capacity-building, ensuring accurate and effective coverage of monetary policy shifts.
“The recapitalisation programme is not just about stronger banks. It is a strategic tool for national development, financial system stability, and regulatory compliance monitoring,” she concluded.
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