By Olawunmi Ashafa

Mr Yemi Odusanya, former Executive Director, Corporate Banking and South, Keystone Bank, says the capital raise by the Central Bank of Nigeria (CBN) for the banks will further fortify the industry’s financial resilience.

He said it would also reduce the likelihood of failures in the future.

Odusanya said this in an interview with the News Agency of Nigeria (NAN) on Saturday in Lagos.

He said that the move could lead to several potential positive outcomes for the banking industry.

The financial expert explained that higher capital requirements couldenhance the overall stability of the banking sector, making it more resilient to economic shocks.

Odusanya noted that the new capital requirements could improve risk management as banks with higher capital levels are generally better equipped to manage risks and withstand adverse market conditions, which can ultimately benefit depositors and the broader economy.

According to him, a well capitalised banking system can boost investor and consumer confidence, potentially attracting more investment and supporting economic growth.

However, on the potential challenges associated with the new capital requirements, the former director said some banks might face challenges in raising the required capital, particularly smaller institutions, which could lead to consolidation or other strategic responses.

Odusanya further said higher capital requirements could potentially limit the ability of banks to extend credit, particularly to small and medium-sized enterprises (SMEs) and individuals, which could have implications for economic growth and access to finance.

“In order to be able to anticipate what lies ahead as a result of the newly proposed capital raise, we need to review the outcome of the 2004 banking consolidation in Nigeria.

“Recall the 2004 banking consolidation was shaped by several events, including: but not limited to poor performance of banks.

“Many banks in Nigeria were facing financial distress and were unable to meet their obligations. This led to a lack of confidence in the banking sector and a need for a stronger and more stable banking system.

“The global financial landscape was changing, and there was a need for Nigerian banks to be more competitive and meet international standards. This led to a push for consolidation and strengthening of the banking sector.

“The CBN and other regulatory bodies put pressure on banks to merge and consolidate in order to create stronger, more stable institutions,” he added.

While the new capital raise in the Nigerian banking system has the potential to strengthen the sector and improve financial stability, Odusanya suggested that it was essential to carefully monitor its impact on lending activities and broader economic dynamics.

According to him, balancing the need for robust capital levels with the imperative of supporting lending and economic growth will be a critical consideration for policymakers and banking institutions.

On March 28, the CBN announced an upward review of the minimum capital requirements for commercial, merchant and non-interest banks.

Commercial banks with international authorisation to increase their capital base to N500 billion and national banks to N200 billion.

Also, commercial banks with national licences must meet a N200 billion threshold, while those with regional authorisation are expected to achieve a N50 billion capital floor.

Similarly, non-interest banks with national and regional authorisations will need to increase their capital to N20 billion and N10 billion, respectively. (NAN)

Edited by Folasade Adeniran

By Kadiri Abdulrahman

A financial expert, Prof. Uche Uwaleke, has commended the Central Bank of Nigeria (CBN) for raising the minimum capital requirement for Nigerian banks.

Uwaleke, a Professor of Capital Market, and the Director, Institute of Capital Market Studies at the Nassarawa State University, Keffi, said this in an interview with the News Agency of Nigeria (NAN) on Friday, in Abuja.

According to him, it is a welcome development that will help strengthen the country’s financial system and a potential boost to the stock market.

He said that, in view of Naira devaluation following unification of exchange rates, the new calibrated minimum capital requirements was commendable, unlike the uniform capital base of N25 billion stipulated in 2005.

He said that the two years period allowed was sufficient to implement the recapitalisation.

According to him, a number of banks had already started the process of recapitalisation before now.

“I believe that First Bank, UBA, GTB, Access Bank and Zenith Banks with international authorisation will have no difficulty meeting this requirement.

“The stock market (Option 1) presents the most feasible option as few will likely go the Merger and Acquisition route.

“Shareholders’ funds comprise paid-up share capital plus reserves. It was permitted in 2005 but now disallowed possibly from the experience of the last exercise,” he said.

Uwaleke said that Access Bank had already announced that it was raising N365 billion through rights issue.

He suggested a different Cash Reserve Ratio (CRR) for the different banks according to their categories.

“Since the new capital base was based on the type of authorisation, the CBN may consider applying a differentiated CRR according to the category of licence,” he said.

Uwaleke added that, “In view of the young age of Non Interest banks in Nigeria, they should be allowed a longer period, say, three years, to meet the minimum capital requirement.”

NAN reports that the CBN, on Thursday, increased the minimum capital requirement for banks with national licences from N25 billion to N200 billion.

The apex bank also increased capital requirement for banks with regional licences from N15 billion to N50 billion , and those with international licences from N100 billion to N500 billion.

According to a statement issued by the Acting Director, Corporate Communications Department of the bank, Mrs Hakama Sidi-Ali, the new minimum capital for merchant banks will be N50 billion.

Sidi-Ali also announced that the new requirements for non-interest banks with national and regional authorisations are N20 billion and N10 billion.

It said that all banks were required to meet the new capital requirements within 24 months beginning from April 1, 2024 and terminating March 31, 2026.

The move is coming days after the Monetary Policy Committee (MPC) meeting of the CBN.

At the MPC meeting, the CBN Governor, Yemi Cardoso, urged Nigerian banks to expedite action on the recapitalisation of their capital base in order to strengthen the financial system.(NAN)(www.nannews.ng)

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Edited by Oluwole Sogunle

By Kadiri Abdulrahman

The Central Bank of Nigeria (CBN), has increased the minimum capital requirement for Deposit Money Banks (DMBs) with national licences from N25 billion to N200 billion.

The apex bank also increased capital requirement for banks with regional licences from N15 billion to N50 billion , and those with international licences from N100 billion to N500 billion.

According to a statement issued by the Acting Director, Corporate Communications Department of the bank, Mrs Hakama Sidi-Ali, the new minimum capital for merchant banks will be N50 billion.

Sidi-Ali also announced that the new requirements for non-interest banks with national and regional authorisations are N20 billion and N10 billion.

The News Agency of Nigeria (NAN) reports that the move is coming days after the Monetary Policy Committee (MPC) meeting.

The CBN Governor, Yemi Cardoso had in the meeting , urged Nigerian banks to expedite action on the recapitalisation of their capital base in order to strengthen the financial system.

Meanwhile, a circular signed by the Director, Financial Policy and Regulation Department, Mr Haruna Mustafa, said that all banks were required to meet the new minimum capital requirement within 24 months commencing from April 1 and terminating on March 31, 2026.

According to Mustafa, the move is to enhance banks’ resilience, solvency, and capacity to continue supporting the growth of the Nigerian economy.

Mustafa urged banks to consider injecting fresh equity capital through private placements, rights issues and offers for subscription to meet the new minimum capital requirements.

He also suggested Mergers and Acquisitions (M&As); and upgrade or downgrade of licence authorisation.

He said that the minimum capital shall comprise paid-up capital and share premium only.

“The new capital requirement shall not be based on the shareholders’ fund.

“Additional Tier 1 (AT1) Capital shall not be eligible for meeting the new requirement.

” Notwithstanding the capital increase, banks are to ensure strict compliance with the minimum capital adequacy ratio (CAR) requirement applicable to their licence authorisation.

“In line with extant regulations, banks that breach the CAR requirement shall be required to inject fresh capital to regularise their position,” Mustafa said.

He said that the minimum capital requirement for proposed banks shall be paid-up capital, adding that the new minimum capital requirement shall apply to all new applications for banking licences submitted after April 1.

“The CBN will continue to process all pending applications for banking licences for which a capital deposit had been made and an Approval-in-Principle (AIP) had been granted.

“However, the promoters of such proposed banks will make up the difference between the capital deposited with the CBN and the new capital requirement not later than March 31, 2026.,” he said

He said that all banks were required to submit an implementation plan, clearly indicating the chosen options for meeting the new capital requirement and various activities involved with their timelines, nor later than April 30.

He said that the CBN would monitor and ensure compliance with the new requirements within the specified time line. (NAN) (www.nannews.ng)

Edited by Ese E. Eniola Williams

By Grace Alegba

The Association of Bureau De Change Operators of Nigeria (ABCON) has called for the immediate implementation of resolutions by the Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria (CBN).

Its president, Alhaji Aminu Gwadabe, made the call in an interview with the News Agency of Nigeria (NAN) on Wednesday in Lagos.

Gwadabe also called on the government to focus on export initiatives amid the escalating inflation rates, while urgently implementing measures discussed at the MPC held in Abuja on Tuesday is considered.

The MPC’s decision to increase the benchmark interest rate by 200 basis points to 24.75 per cent was motivated by the alarming inflation rate, which stood at 31.70 per cent in February, according to CBN Governor, Yemi Cardoso.

Gwadabe suggested collaboration among export-related agencies to provide support and innovative strategies to exploit the potential in sectors such as agribusiness, solid minerals, IT, arts, and music.

The ABCON boss commended the MPC’s recommendation for the government to release food stocks from its silos to alleviate inflationary pressures on food prices, urging swift action on this front.

Gwadabe highlighted the importance of a paradigm shift in dollar supply within the economy, proposing the de-risking of non-oil export products through bonds and guarantees.

Regarding CBN’s monetary measures, Gwadabe stressed the balanced approach of tightening Naira liquidity through the hike in the Monetary Policy Rate (MRR) and Cash Reserve Ratio (CRR).

This, he said, should be done while simultaneously attracting dollar liquidity through high-interest rate bonds.

He explained the organic and inorganic aspects of liquidity injection, emphasising the importance of maintaining policy measures to stabilise the market in the medium to long term.

Gwadabe emphasised the role of Bureau De Change operators in moderating market volatility and urged the CBN to continue engaging them as partners.

“The BDCs will continue to be the most effective transmission mechanism of the apex bank foreign exchange policy.

“The BDCs, despite the generalisation of stigmatisation and crudeness of different sectors in the economy, remained the most effective and foot soldiers of the apex bank in checkmating volatility and spikes in the markets.

“Our periods of effectiveness started in 2006, 2009, 2017 and now in 2024,” he said.

The ABCON president called on all his members to continue to play within the rules to earn public trust and that of the regulators.

“Finally, my concluding view is to continue to stem hoarding and speculation in the financial market. The CBN should play with liquidity more than the cash reserve requirement.

“For instance, when Tanzania want to discourage speculative and hoarding behaviour, they raised their liquidity ratio to 40 per cent.

“This resulted in many financial institutions selling off their dollars position in the market to meet up with the regulators requirements,” he said. (NAN)

Edited by Olawunmi Ashafa

By Constance Athekame

The Permanent Secretary, Federal Ministry of Power, Alhaji Mamudah Mamman says human capital development is critical to having a sustainable and effective power sector.

Mamman said this on Wednesday in Abuja at a one-day Stakeholders Retreat for Practitioners in the Electric Power Sector, which had the theme “Role of Human Capital Development in the Nigeria Electricity Supply Industry.

The News Agency of Nigeria (NAN) reports that the retreat was organised by the National Power Training Institute of Nigeria (NAPTIN) in collaboration with Hak-Ben and Associates Nigeria Ltd.

Mamman noted that human capital development was the backbone of any industry.

He said this was critical especially in the electricity supply sector, where the complexity of technologies and processes required not just skilled hands but innovative minds to navigate the potential within.

“We stand united in the belief that development of human capital is integral to achieving our goals in the Nigeria Electricity Supply Industry (NESI).

“It is through our skilled professionals, technicians, engineers and all members of the workforce that we can innovate, improve service delivery and drive the sector towards greater heights of achievement.

“The NESI is at a pivotal stage. As we strive towards enhancing our capacity and reliability in electricity supply, the role of skilled human capital cannot be overstated,’’ the Permanent Secretary said.

He stated that the power sector’s collective aim was to forge a future where the country’s energy sector was not only sustainable.

Mamman added that it must also be a beacon of innovation and excellence in Africa and beyond.

“This requires an unweaving commitment to invest in training, development and empowerment of our workforce, ‘’ he said.

Mamman said NAPTIN in alignment with its objectives remained at the forefront of the mission to continuously be evolving to meet the educational and training needs of the power sector.

“By leveraging national and international expertise, NAPTIN is poised to elevate the standards of training and development by ensuring the sector’s workforce is equipped with necessary knowledge and skills to propel the industry forward.

“As we engage in today’s discussions, let us focus on the strategies and actions required to enhance human capital development in the NESI.

“Our deliberations will undoubtedly contribute to shaping a robust framework for nurturing a competent, innovative and motivated workforce capable of driving transformation in the Nigerian electricity supply sector,” he said.

On his part, Mr Aliyu Tukur, Managing Director of Nigerian Electricity Management Services Agency (NEMSA), said the workshop aimed at enhancing the human capacity development of professionals in the power sector.

Tukur said NEMSA had been in strategic collaboration with NAPTIN trough training and retraining of its engineers and technical officers.

According to him, NAPTIN is also collaborating with NEMSA on competence certification of trained electrical installation personnel in the country.

“We are pleased with NAPTIN’s initiative at driving the review of the various fronts in capacity development to align with evolving technologies in the power sector,” he said.

Earlier, the NAPTIN Director-General, Mr Ahmed Nagode, had said by pooling knowledge, experiences and resources, stakeholders could create a synergy that would propel the sector towards brighter and more sustainable future.

“We must foster an environment of inclusivity and cooperation, where every stakeholder, from government agencies to private companies, from academia to industry experts, has a seat at the table and a voice in shaping the direction of our efforts.

“Together, we can bridge gaps, overcome challenges, and unlock new opportunities for growth and progress,” he said.

According to him, NAPTIN’s alignment with economic growth and job creation is crucial in supporting President Bola Tinubu’s Renewed Hope Agenda.

Nagode said that NAPTIN’s training programmes and capacity-building initiatives would create a skilled workforce capable of filling key roles in the electricity sector.

“Also, NAPTIN plays a significant role in empowering Nigerian youths by providing them with opportunities for skill acquisition, certification, and career development in the energy sector.

“This empowers young people to become active participants in the workforce, fostering economic independence and contributing to the overall growth of the economy.

“NAPTIN’s focus on human capital development aligns with Mr President’s agenda to harness the potential of Nigeria’s diverse talent pool.

“By investing in the development of skilled professionals, NAPTIN supports the country’s economic diversification efforts and productivity,” he added.

NAN also reports that the highlight of the retreat was the inauguration of the Sector Skills Council of Power by the Permanent Secretary.

Council members were drawn from stakeholders in the power sector and other relevant agencies.(NAN) (www.nannews.ng)

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(Edited by Emmanuella Anokam and Olawale Alabi)