Skip links



The Central Bank of Nigeria (“CBN”), through its circular dated 28th March 2024 (the “Circular”), announced an upward review of the minimum capital requirement for commercial, merchant, and non-interest banks in Nigeria (the “Recapitalisation”). The Circular was passed pursuant to Section 9 of the Bank and Other Financial Institutions Act, 2020 (“BOFIA”), which empowers CBN to determine the minimum paid up share capital of banks licensed under the BOFIA.

The Recapitalisation is expected to result in a paradigm shift in the banking sector. For context, the last recapitalisation in the sector was in 2005 and its effects are still evident today. The increase in banks’ minimum capital requirement from N2bn to N25bn saw a reduction of banks from 89 to 24 through mergers and acquisitions. It is anticipated that the effects today will be similar.

Banks’ New Minimum Capital

The CBN requirement pegs the minimum capital base for commercial banks with international authorisation at N500bn. Conversely, the requirement for commercial banks with national authorisation is N200bn, while the new requirement for those with regional authorization is N50bn. Merchant Banks also have a minimum capital requirement of N50bn while National and Regional Non-Interest Banks have capital requirements of N20bn and N10bn respectively. Another implication of the Circular is that the minimum requirement comprises paid-up capital and share premium and excludes Shareholders’ funds for existing banks. Nonetheless, the minimum capital requirement for proposed banks (as opposed to existing banks) shall be the paid-up capital.

Options for Meeting the New Minimum Capital

The Circular provides three options that banks may undertake to raise capital. They are as follows: (i) injecting fresh equity capital through private placement, rights issue, and offer for subscription; (ii) mergers and acquisitions; and (iii) upgrade and downgrade of licence authorisation.

Implementation Timeline

With regard to the timeline for implementation, the new CBN policy applies differently to existing and new banks. While existing banks are required to meet the minimum capital requirement within 24 months commencing from 1st April 2024 and terminating on 31st March 2026, the requirement is immediately applicable to all new applications for banking licences submitted after 1st April 2024, for proposed banks. Notably, the Circular stipulates 31st March 2026 as the deadline for proposed banks, which have already made a capital deposit and/or obtained an Approval-in-Principle from CBN.

Submission of Implementation Plan

Notwithstanding the implementation timeline discussed above, the Circular creates an obligation on banks to submit an implementation plan containing the options to meet the capital requirement and the timelines. The implementation plan is required to be submitted before 30th April 2024.


From a regulatory standpoint, CBN expects to ensure compliance by conducting on-site and off-site reviews, and engaging stakeholders. CBN will also strictly enforce Fit and Proper checks for all prospective and significant shareholders, directors and other senior management staff of licensed banks. It is also noteworthy that Section 9(2) of BOFIA enables the CBN to revoke banking licences for non-compliance.