Capital Market Recapitalisation: CBN Grants Union Bank, Polaris, and Keystone Another Chance After March 31 Deadline
The Central Bank of Nigeria (CBN) has reportedly granted three banks under regulatory management an additional three weeks to complete their recapitalisation plans. This extension applies to Union Bank, Polaris Bank, and Keystone Bank, which have been facing ongoing legal and regulatory hurdles. The banks are exploring options such as raising fresh capital or pursuing mergers and acquisitions to meet the new capital requirements. According to the CBN, 33 banks successfully met the March 31, 2026, recapitalisation deadline, collectively raising a total of N4.65 trillion in new capital.
Legal and Regulatory Challenges Influence Decision
The three banks have been under CBN intervention since January 2024, when the apex bank dissolved their boards and management teams over alleged violations of the Banks and Other Financial Institutions Act (BOFIA) 2020. The regulator cited issues including regulatory breaches, weak corporate governance practices, failure to comply with licensing conditions, and activities considered a threat to financial system stability. Complicating matters further are ongoing legal disputes surrounding the ownership and control of some of the banks. In the case of Union Bank, former owners recently secured a Federal High Court judgment nullifying the CBN's takeover of the institution. The central bank has challenged the ruling and filed an appeal. Sources indicated that these unresolved legal matters contributed to the regulator's decision to grant the banks additional time to complete the recapitalisation process.
Banks Weigh Capital Raising and Licence Restructuring Options
Under the revised capital framework introduced by the CBN, commercial banks with national licences are required to maintain a minimum share capital and share premium of N200 billion. Analysts estimate that Union Bank, Polaris Bank, and Keystone Bank collectively require more than N350 billion to comfortably retain their national banking licences. The banks also have the option of converting to regional banking licences, which carry a lower minimum capital requirement of N50 billion. According to insiders, the affected institutions are currently evaluating standalone solutions, including fresh capital injections from private investors and possible adjustments to their licence categories. The CBN is also understood to be allowing them to consider mergers and acquisitions where necessary. CBN Governor Olayemi Cardoso recently assured stakeholders that the three banks remain fully operational and that the regulator would continue supporting efforts to resolve their legal and regulatory challenges while safeguarding financial system stability.
CBN Mandates Banks to Complete Cybersecurity Self-Assessment
Meanwhile, the CBN has mandated banks to complete a mandatory cybersecurity self-assessment within three weeks. The assessment tool, which is part of efforts to strengthen resilience across Nigeria's financial system, will evaluate governance, risk management, and cyber resilience. According to a letter dated March 30, 2026, and published on the apex bank's website, institutions are expected to submit accurate and verifiable data or face regulatory sanctions.
