The Central Bank of Nigeria (CBN), under the leadership of Olayemi Cardoso, has sustained its push to entrench regulatory excellence and strengthen the country’s financial system through an ambitious bank recapitalisation programme.
With over 20 banks already meeting the new minimum capital requirements, the exercise highlights the regulator’s resolve to build a stronger, more resilient banking system capable of supporting economic growth and maintaining financial stability.
Analysts note that robust regulatory standards are critical to safeguarding Nigeria’s financial ecosystem and aligning it with global best practices.
At the core of the ongoing recapitalisation drive is the objective of strengthening banks through fresh capital raising, balance sheet restructuring, and improved governance frameworks. The emergence of larger and stronger banks is widely seen as one of the most important benefits of the exercise, as better-capitalised institutions are more capable of absorbing shocks and financing long-term economic development.
For Cardoso, sustainable economic growth can only be achieved with strong support from a sound and resilient financial system. The CBN leadership believes the banking sector must be positioned to complement government policies aimed at business growth and the long-term ambition of building a $1 trillion economy. This thinking has informed the apex bank’s determination to align monetary stability with broader fiscal and development priorities.
Central to this agenda is the CBN’s emphasis on compliance, governance, and effective risk management. Cardoso has consistently stressed that strengthening Nigeria’s financial system goes beyond capital accumulation, requiring a deep-rooted culture of compliance and accountability. The apex bank has therefore reaffirmed its commitment to maintaining a transparent and resilient financial system through stricter regulatory oversight and enhanced risk management across financial institutions.
Milestones in recapitalisation
Ahead of the March 31, 2026 deadline, Cardoso, in his most recent public update on the programme, disclosed that 16 banks had already met the new capital requirements, while 27 others were actively raising funds. More recently, Muhammad Abdullahi, deputy governor, Economic Policy, stated at a Nigeria Economic Summit Group forum that not less than 20 banks had now met the new thresholds.
Nigeria currently has 44 deposit-taking banks across different licence categories. As the deadline approaches, at least seven banks are reportedly weighing the option of scaling down their licences from national to regional, largely due to the geographic concentration of their operations and the increasing reach of digital banking services across the country.
One bank that currently holds an international banking licence also indicated recently that it may scale down to a national licence in the immediate period before the deadline, while continuing recapitalisation efforts to strengthen its capital base and eventually regain international status.
Under the CBN’s regulatory framework, banks are categorised into three broad licence types, international, national, and regional, based largely on financial strength and operational scope. Beyond the capital-raising process itself, banks are required to subject new equity funds to rigorous capital verification before final clearance, allotment approval, and the eventual recognition of funds as part of their capital base.
The CBN serves as the final signatory in a tripartite capital verification committee comprising the apex bank, the Securities and Exchange Commission (SEC), and the Nigeria Deposit Insurance Corporation (NDIC). This committee is tasked with scrutinising funds raised under the recapitalisation programme to ensure transparency and compliance.
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New capital to hit N4.14 trillion
With total new capital estimated at about N4.14 trillion and over 20 banks already meeting minimum requirements, 2026 is shaping up to be a significant milestone for Nigeria’s economy. The CBN had announced the two-year recapitalisation exercise on March 28, 2024, with implementation commencing on April 1, 2024. The programme requires minimum capital of N500 billion, N200 billion, and N50 billion for commercial banks with international, national, and regional licences respectively. The compliance window closes on March 31, 2026.
Cardoso has said the apex bank will strictly enforce stronger governance, greater transparency, and firmer accountability to safeguard the funds raised. He disclosed that several banks have already exceeded the new thresholds, while others are progressing steadily and are well positioned to meet the 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.
As part of broader reforms, the CBN has established a dedicated Compliance Department, now fully operational, with responsibilities covering financial crime supervision, market conduct, enterprise security, corporate governance, and environmental, social, and governance principles.
According to the CBN governor, the process of enforcing stronger controls over raised funds is ongoing, with a redesigned credit-risk framework expected to ensure prudent deployment of new capital. In the past, post-recapitalisation liquidity often led to aggressive risk-taking, raising concerns about loan quality and asset deterioration.
To guard against a repeat, Cardoso said the apex bank is determined to avoid the boom-and-bust cycles that have characterised previous recapitalisation exercises. He noted that the web-enabled CBN Credit Risk Management System now allows banks and stakeholders to directly access borrower information, while ongoing integration with banks’ internal systems is expected to further enhance efficiency.
In a report titled ‘Nigeria’s Macro Headwinds Trigger Bank Recapitalisation’, Deloitte estimated total funds to be raised at N4.14 trillion, describing the upward review of banks’ capital base as essential to boosting capital adequacy in the face of inflation, interest rate pressures, exchange rate volatility, and foreign exchange illiquidity. According to the firm, stronger capital buffers will allow banks to take on bigger risks, absorb shocks, and improve liquidity and loss-bearing capacity.
Cardoso has repeatedly stressed that Nigeria’s banking system remains fundamentally sound and resilient, even as the CBN remains vigilant against emerging risks such as cyber threats, credit concentration, and operational vulnerabilities. He noted that the ongoing transition to Basel III will further strengthen capital quality, liquidity management, and resilience.
With just months to the end of the exercise, the CBN boss said recapitalisation remains firmly on track, adding that recent stress tests confirmed the robustness of the banking system, with key prudential indicators comfortably met.
Beyond capital, Cardoso said the apex bank is also reinforcing operational discipline to ensure the financial system serves all Nigerians effectively. Measures include reforms across the cash lifecycle, guidelines on optimal ATM-to-card ratios, stricter approval requirements for branch or ATM closures, sanctions for poor cash availability, and intensified supervision of payment agents and POS operators nationwide.
He has also emphasised ethics and professionalism in the banking industry, noting that the CBN has adopted the FX Global Code for all authorised dealers and market participants. Surveillance has been intensified to eliminate bad actors and enforce a zero-tolerance stance on compliance violations, while the Chartered Institute of Bankers of Nigeria has been urged to lead in upholding industry standards.
Supporting the policy, Oliver Alawuba, Group managing director of United Bank for Africa, described the recapitalisation drive as timely and essential. He said it would strengthen the sector’s ability to withstand shocks such as inflation, currency volatility, and geopolitical disruptions, while positioning banks to finance Nigeria’s long-term economic transformation.
According to Alawuba, the policy goes beyond compliance and represents a forward-looking strategy to equip banks to operate at the scale required by a trillion-dollar economy, supporting both traditional sectors such as oil and gas, agriculture, and manufacturing, as well as emerging areas including fintech, green energy, and infrastructure.
Cardoso has reiterated that key indicators, including non-performing loan and liquidity ratios, remain within prudential benchmarks, reinforcing confidence in the sector. He noted that many banks have already raised required capital well ahead of schedule, putting the industry in a strong position to expand credit to MSMEs and support investment in critical sectors.
As the recapitalisation deadline draws nearer, the CBN’s strategy points to a banking system that is not only larger, but more disciplined, resilient, and capable of powering Nigeria’s long-term economic ambitions.
