The Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite actions on the increase of their capital base in order to strengthen the financial system against potential risk.
This was made known by the Governor of the CBN, Olayemi Cardoso, while briefing the press after the 294th meeting of the Monetary Policy Committee (MPC) on Tuesday, March 26, 2024, in Abuja, where interest rate was hiked from 22.75% to 24.75% by the committee.
Cardoso stated that the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable, safe and sound.
The committee, however, noted that to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.
Recommended reading: CBN Recapitalization: Minimum Capital Base for Banks May hit as much as N909 billion – Report
What the CBN Governor is saying
Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.
“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”
In case you missed this
- Recall that in November 2023, Cardoso at the 58th Annual Bankers’ Dinner organized by the Chartered Institute of Bankers of Nigeria (CIBN) announced plans by the apex bank to carry out a fresh round of banking recapitalization for the Deposit Money Banks (DMBs).
- Cardoso, in his report to the Policy Advisory Council on the national economy, said President Bola Ahmed Tinubu set an ambitious target of reaching a $1 trillion Gross Domestic Product (GDP) by 2030.
- According to him, banks play a significant part in the envisaged $1 trillion economy by 2030.
- Speaking on the process of recapitalization, Cardoso highlighted the crucial need for banks to be recapitalized, considering the substantial developmental role the apex bank anticipates them to fulfil over the next seven years.
Recommended reading: Bank Recapitalisation: 17 out of 24 banks might not meet CBN capital requirements- Report
