As the Central Bank of Nigeria (CBN) under Governor Olayemi Cardoso continues its drive to uphold regulatory excellence and strengthen Nigeria’s financial system, the ongoing bank recapitalisation programme points to the regulator’s determination to entrench a strong and resilient financial system capable of supporting Nigeria’s ambition of becoming a trillion-dollar economy, ONYEDIKA AGBEDO reports.

Towards achieving a resilient and stronger financial system, the Central Bank of Nigeria (CBN) has been unrelenting in driving the ongoing recapitalisation of banks through capital raising. The CBN had, on March 28, 2024, announced a two-year bank recapitalisation exercise, which commenced on April 1, 2024. The recapitalisation plan requires minimum capital of N500 billion, N200 billion and N50 billion for commercial banks with international, national and regional licences respectively. The 24-month timeline for compliance ends on March 31, 2026. The emergence of stronger and bigger banks is one of the crucial benefits expected from the recapitalisation exercise.
 
The apex bank under the leadership of its Governor, Olayemi Cardoso, believes that achieving sustainable economic growth requires strong support from the financial system. The financial sector regulator is, therefore, keen on aligning monetary and fiscal policies to achieve government’s vision of growth for businesses and a $1 trillion economy size for the country.
 
For Cardoso, the CBN’s leadership goal remains to protect Nigeria’s financial sector while ensuring its resilience and credibility locally and internationally by fostering a strong culture of compliance and strengthening risk management frameworks.  To achieve these goals, the apex bank has reaffirmed its commitment to maintaining a transparent and resilient financial system by reinforcing regulatory compliance and risk management across Nigerian financial institutions.
 
Milestones Assessment For Recapitalisation
Ahead of the March 31 deadline, Deputy Governor, Economic Policy, CBN, Dr. Muhammad Abdullahi, who spoke on Thursday, January 15, at Nigeria Economic Summit (NESG) forum, in Lagos, said not less than 20 banks have met the new capital requirements.
 
Recall that at the last Monetary Policy Committee (MPC) meeting of 2025, Cardoso had disclosed that 16 banks had achieved full compliance with the revised capital requirements, ahead of the deadline.
Abdullahi’s disclosure therefore indicated a steady progress in the Cardoso-led CBN’s quest to entrench a strong and resilient banking system in the country.
 
Nigeria currently has 44 deposit-taking banks across various licence categories. As the deadline approaches, The Guardian learnt that at least seven banks were weighing the option of scaling down their licence from national to regional banks, given the concentration of their operations and the almost equal ubiquitous advantage offered by Nigeria’s expansive digital banking.
 
It was also learnt that a bank, which currently holds an international banking licence, indicated a few days ago that it could scale down to a national banking licence in the immediate period before the deadline, while pursuing further recapitalisation to boost its capital base and regain its international banking authorisation.
 
The CBN categorises banks into three broad categories – international, national, and regional – based on their financial strength. Under the recapitalisation guidelines, beyond raising funds, banks are required to subject their new equity funds to capital verification before the clearance of the allotment proposal and release of the funds to the bank for onward completion of the offer process and addition of the new capital to its capital base.
 
The CBN is the final signatory in a tripartite capital verification committee that include the Securities and Exchange Commission (SEC) and the Nigeria Deposit Insurance Corporation (NDIC). The committee is saddled with scrutinising new funds being raised by banks under the ongoing banking sector recapitalisation programme.
 
New Capital To Hit N4.14 Trillion
In a report titled, ‘Nigeria’s Macro Headwinds Trigger Bank Recapitalisation,’ Deloitte, a global accounting and audit firm, put the total funds to be raised in the recapitalisation exercise at N4.14 trillion.
 
It said the upward review of banks’ capital base from N50 billion to N500 billion, depending on the type of licence held by the bank, remains an essential action required to boost capital adequacy needs of the Nigerian financial industry.
 
Nigeria banks’ capital adequacy, the report said, has been significantly impacted by macroeconomic challenges such as high inflation and interest rates, currency volatility and forex illiquidity.
 
“The upward revision will ensure that Nigerian banks have the capacity to take on bigger risks and stay afloat amid both domestic and external shocks. It also means increased liquidity position of banks, which will help broaden their loss-bearing capabilities,” the report said.
 
With an expected N4.14 trillion new capital being raised, and 20 banks already meeting the minimum capital requirement, expectations are high that this year will turn out to be a significant milestone in the economy.
 
Cardoso, in his last public update on the recapitalisation programme in December 2025, disclosed that the CBN would be enforcing stronger governance, greater transparency, and firmer accountability to protect raised funds. He further disclosed that while several banks have already met the new capital thresholds, others were advancing steadily and were well positioned to comfortably meet the March 31, 2026, deadline.
 
“Banks meeting or exceeding the new requirements is a clear testament to the depth, resilience, and capacity of Nigeria’s banking sector,” Cardoso stated.
 
He added that the CBN has equally established a dedicated Compliance Department, now fully operational, with mandates covering financial crime supervision, market conduct, enterprise security, corporate governance, and Environmental, Social, and Governance (ESG).
 
According to Cardoso, the process enforcing stronger controls on raised funds was ongoing with the redesigning of the credit-risk framework expected to ensure that raised funds are well managed by financial institutions.
 
Previously, banks were awash with post recapitalisation funds, with analysts predicting that without proper risk management policies and regulatory controls, chances of misapplying such raised funds through risky loans remain high.
 
To guard against such occurrence, Cardoso stated: “As recapitalisation progresses, we are redesigning the credit-risk framework to enforce stronger governance, greater transparency, and firmer accountability across the sector. We are determined to break the boom-and-bust cycle that has accompanied past recapitalisation efforts.”
 
Already, the CBN Credit Risk Management System (CRMS) is web-enabled, allowing banks and other stakeholders to dial directly into the CRMS database to render statutory returns or conduct status enquiry on borrowers. Also, the CBN is in the process of integrating the CRMS with other systems operating in the banks to make it more efficient.
   
Cardoso maintained that Nigeria’s banking system remains fundamentally sound and resilient, describing it as a cornerstone of the country’s financial stability.
 
“At the same time, we remain vigilant to emerging risks, including cyber threats, credit-concentration pressures, and operational vulnerabilities. These are being addressed through strengthened risk-based supervision and our ongoing transition to Basel III, which will further bolster resilience, improve capital quality, and strengthen liquidity monitoring,” he said.
 
The CBN boss had disclosed that with just four months to the conclusion of the recapitalisation exercise, the recapitalisation process remains firmly on track.
 
“As we strengthen the capacity of our banks, stress-testing this year confirms that Nigeria’s banking sector remains fundamentally robust. Key financial soundness indicators overwhelmingly satisfied prudential benchmarks during the year,” Cardoso added.
 
He said the apex bank was reinforcing operational discipline to ensure the financial system serves all Nigerians reliably.
 
“Our starting point was a comprehensive, end-to-end review of the entire cash lifecycle – from production, to transportation, to distribution, and eventual access by consumers. This holistic assessment enabled us to address root causes rather than symptoms.
 
“As a result, we recalibrated our cash-printing models, issued guidelines on the optimal ATM-to-card ratio, strengthened requirements for CBN approval before ATM or branch closures, enforced sanctions on banks whose ATMs fail to dispense cash, and intensified supervision of payment agents and POS operators nationwide,” he said.
 
Speaking recently to bankers, Cardoso said the ethics and professionalism of bankers and treasurers were under constant scrutiny.
 
According to him, the CBN introduced the FX Global Code for all authorised dealers and market participants to ensure full compliance with regulations. He urged the Chartered Institute of Bankers of Nigeria (CIBN) to take the lead in upholding and demonstrating the highest standards in the industry.
 
“At the Central Bank, we have intensified surveillance of market activities to ensure compliance and eliminate bad actors who attempt to undermine the system. Together, we must build a market based on strong governance and transparency. As regulators, we will maintain a zero-tolerance approach to compliance violations,” he said.
 
Banking Sector Remains Robust
Cardoso had earlier explained that the banking sector remains robust with key indicators reflecting a resilient system.
 
“The non-performing loan ratio remains within the prudential benchmark of five per cent, showcasing strong credit risk management. The banking sector liquidity ratio comfortably exceeds the regulatory floor of 30 per cent, a level which ensures banks are maintaining adequate cash flow to meet the needs of customers and their operations. The recent stress test conducted also reaffirmed the continued strength of our banking system,” he said.
  
The Group Managing Director of United Bank for Africa (UBA), Mr. Oliver Alawuba, described the ongoing CBN bank recapitalisation policy as both timely and essential in positioning the financial system to meet the demands of a growing and globally competitive economy.

Alawuba said the initiative would boost the resilience of the banking sector by strengthening its capacity to withstand economic shocks such as inflation, currency volatility and global geopolitical disruptions. He noted that the policy would also place Nigerian banks on a stronger footing to finance the country’s long-term economic transformation, including funding of large-scale infrastructure and industrial projects.
 
Alawuba further stressed that the recapitalisation policy goes beyond regulatory compliance.
 
“It is a forward-looking strategy aimed at equipping Nigerian banks to operate at the scale and sophistication required by a trillion-dollar economy,” he noted.    
 
He said the move would enhance the sector’s ability to support traditional economic drivers such as oil and gas, agriculture and manufacturing, as well as emerging sectors such as fintech, green energy and infrastructure development.
 
“Nigerian banks need adequate capital buffers to meet the evolving demands of these sectors. Without this, the industry cannot effectively rise to the challenge,” he said.