The Central Bank of Nigeria, CBN, has cautioned deposit money banks against sourcing capital from illicit channels as part of the ongoing recapitalisation exercise, stressing that such actions could destabilise the financial system.
Speaking at the 36th Finance Correspondents Association of Nigeria and Business Editors seminar held in Abuja on Monday, the Director of Banking Supervision at the CBN, Dr Olubukola Akinwunmi, said the apex bank would enforce strict verification processes to ensure compliance.
“We ensure there is proper verification. And the verification is to ensure that we do not encourage illicit funds into our banking system. Illicit funds can only destabilise the banking system,” Akinwunmi stated.
The recapitalisation initiative, which commenced on April 1, 2024, is expected to run for 24 months and aims to strengthen banks’ capacity to support Nigeria’s $1tn economy target.
Under the new framework, international commercial banks are required to raise their minimum capital to N500bn, while national and regional banks must meet thresholds of N200bn and N50bn, respectively.
Akinwunmi explained that the recapitalisation exercise was designed not just to meet regulatory requirements but to prepare the sector for emerging economic and global challenges.
“The recapitalisation is also about strengthening the financial system for the future. Larger capital bases translate to greater capacity to fund high-impact sectors such as infrastructure, manufacturing, and agriculture,” he added.
Also speaking, the CBN Deputy Governor, Ms Emem Usoro, underscored the strategic importance of a robust banking sector in achieving national economic ambitions.
“We must consider the recapitalisation of our banks to be able to fund, finance and power the economy and favourably compete globally with its peers in other climes,” she said.
Usoro noted that the recapitalisation effort is a proactive response to evolving global financial dynamics and a critical step toward building a resilient, globally competitive financial system.
The CBN emphasised that banks could explore various options to meet the new capital requirements, including mergers, public offers, and strategic foreign investments, while maintaining regulatory oversight and transparency.
