The Central Bank of Nigeria (CBN), under the leadership of Governor Olayemi Cardoso, continues to demonstrate unwavering commitment to regulatory excellence and the strengthening of Nigeria's financial system. The ongoing bank recapitalisation programme stands as a clear testament to the regulator's determination to establish a robust and resilient financial framework capable of supporting Nigeria's ambitious goal of becoming a trillion-dollar economy.
Recapitalisation Framework and Progress
Initiated on April 1, 2024, following an announcement on March 28, 2024, the two-year bank recapitalisation exercise sets specific minimum capital requirements for different categories of banks. Commercial banks with international licences must achieve a minimum capital of N500 billion, national banks require N200 billion, and regional banks need N50 billion. The compliance deadline for these requirements is set for March 31, 2026.
Recent assessments indicate significant progress in this ambitious programme. Deputy Governor for Economic Policy at the CBN, Dr. Muhammad Abdullahi, revealed during a Nigeria Economic Summit Group forum in Lagos that at least twenty banks have already met the new capital requirements. This represents steady advancement from the sixteen banks Governor Cardoso reported as fully compliant during the last Monetary Policy Committee meeting of 2025.
Strategic Adjustments and Compliance Mechanisms
As the deadline approaches, strategic adjustments are emerging within the banking sector. The Guardian has learned that at least seven banks are considering scaling down their licence from national to regional status, primarily due to their concentrated operations and the widespread accessibility offered by Nigeria's expanding digital banking infrastructure. Additionally, one bank currently holding an international banking licence has indicated potential temporary downgrading to a national licence while pursuing further recapitalisation efforts to eventually regain its international authorisation.
The CBN has established rigorous compliance mechanisms to ensure the integrity of the recapitalisation process. Banks must subject their newly raised equity funds to capital verification before receiving clearance for allotment proposals. This verification process involves a tripartite committee comprising the CBN, Securities and Exchange Commission (SEC), and Nigeria Deposit Insurance Corporation (NDIC), with the CBN serving as the final signatory.
Economic Implications and Sector Resilience
According to a Deloitte report titled 'Nigeria's Macro Headwinds Trigger Bank Recapitalisation,' the total funds expected to be raised through this exercise amount to N4.14 trillion. This substantial capital injection is deemed essential to boost the capital adequacy needs of Nigeria's financial industry, which has faced significant challenges from macroeconomic factors including high inflation, interest rate fluctuations, currency volatility, and foreign exchange illiquidity.
Governor Cardoso has emphasized that the upward capital revision will enable Nigerian banks to undertake larger risks while maintaining stability amid both domestic and external economic shocks. The increased liquidity position resulting from this recapitalisation will enhance banks' loss-bearing capabilities and contribute to broader economic resilience.
Enhanced Governance and Risk Management
The CBN has implemented several measures to ensure proper management of the raised funds and prevent the misapplication that characterized previous recapitalisation cycles. Governor Cardoso disclosed in December 2025 that the central bank would enforce stronger governance, greater transparency, and firmer accountability to protect the newly raised capital. A dedicated Compliance Department has been established and is now fully operational, with mandates covering financial crime supervision, market conduct, enterprise security, corporate governance, and Environmental, Social, and Governance (ESG) considerations.
Furthermore, the CBN is redesigning its credit-risk framework to enforce these governance principles across the sector. The web-enabled Credit Risk Management System (CRMS) allows banks and stakeholders to directly access the database for statutory returns or borrower status enquiries. Integration of CRMS with other banking systems is currently underway to enhance efficiency and oversight.
Sector Assessment and Future Outlook
Governor Cardoso maintains that Nigeria's banking system remains fundamentally sound and resilient, serving as a cornerstone of the country's financial stability. Recent stress tests have confirmed the sector's robustness, with key financial soundness indicators satisfying prudential benchmarks. The non-performing loan ratio remains within the five percent prudential benchmark, while the banking sector liquidity ratio comfortably exceeds the regulatory floor of thirty percent.
The CBN continues to address emerging risks including cyber threats, credit-concentration pressures, and operational vulnerabilities through strengthened risk-based supervision and the ongoing transition to Basel III standards, which will further bolster resilience, improve capital quality, and strengthen liquidity monitoring.
Industry Perspectives and Economic Transformation
Industry leaders have expressed support for the recapitalisation initiative. Oliver Alawuba, Group Managing Director of United Bank for Africa, described the policy as both timely and essential for positioning Nigeria's financial system to meet the demands of a growing and globally competitive economy. He emphasized that the initiative would enhance the banking sector's capacity to withstand economic shocks while placing Nigerian banks on stronger footing to finance the country's long-term economic transformation.
Alawuba noted that the recapitalisation extends beyond mere regulatory compliance, representing a forward-looking strategy to equip Nigerian banks with the scale and sophistication required by a trillion-dollar economy. This enhanced capital base will enable banks to support traditional economic drivers such as oil and gas, agriculture, and manufacturing, as well as emerging sectors including fintech, green energy, and infrastructure development.
As the March 2026 deadline approaches, the CBN's recapitalisation drive continues to progress steadily, with expectations that this year will mark a significant milestone in strengthening Nigeria's financial system and supporting broader economic ambitions.
