Increased capital requirements for banks will boost risk management – CCPE boss
Dr Muda Yusuf, founder of the Centre for the Promotion of Private Enterprise (CPPE), says the upward adjustment of capital requirements for banks will improve their ability to manage risks and withstand economic shocks.
Yusuf said this in a statement on Friday while responding to CBN’s announcement on recapitalisation requirements for banks.
The News Agency of Nigeria (NAN) reports that the apex bank had on Thursday raised minimum capital requirement for commercial banks with regional, national and international licences to ₦50 billion, ₦200 billion and ₦500 billion respectively.
CBN also raised the capital base of merchant banks with national licences to ₦50 billion while it increased that of non-interest banks with regional licences to ₦10 billion and ₦20 billion for those with national licences.
CBN raises top banks capital base to N500bn
The CPPE boss said every economy deserved a stable and virile banking system, adding that adequate capitalisation was a key attribute of banking system stability.
“Meanwhile, it is important to assure the banking public that all our banks are safe and sound. All financial soundness indicators are positive for all our banks.
“The recapitalisation story should be managed professionally to avoid creating vulnerabilities for the banks and banking system,” he said.
He commended the CBN for giving banks a year notice, saying the time-frame would give the banks sufficient time to strategise for a new capitalisation regime.
He said the CBN governor, Mr Yemi Cardoso, had earlier hinted about the banks recapitalisation at a Chartered Institute of Bankers of Nigeria (CIBN) dinner in 2023.
“So, the announcement did not come as a surprise. There are strong reasons to justify the recapitalisation proposition.
“The last major recapitalisation was done in 2004 when Prof. Charles Soludo was a CBN governor and minimum capitalisation was N25 billion, which was an equivalent of about 190 million dollars.
“At the current exchange rate, this is an equivalent of over N250 billion,” he said.
