The Central Bank of Nigeria (CBN) has announced its plan to raise the capital base of commercial banks in the country, to enable them to service the $1 trillion economy that President Bola Tinubu is aiming for in the near future.
The CBN Governor, Olayemi Cardoso, said that Nigerian banks are not liquid enough to meet the financial system’s needs in the envisioned larger economy.
Cardoso made this disclosure on Friday at the 58th Annual Bankers’ Dinner and grand finale of the 60th anniversary of the Chartered Institute of Bankers of Nigeria (CIBN).
He said that the CBN had evaluated the adequacy of the banking industry and found that the current capital level was insufficient to ensure stability and growth.
He said: “We need to ask ourselves: Will Nigerian banks have sufficient capital relative to the financial system’s needs in servicing a $1.0 trillion economy in the near future? In my opinion, the answer is “No!” unless we take action. Therefore, we must make difficult decisions regarding capital adequacy. As a first step, we will be directing banks to increase their capital.”
Newsflash Nigeria reports that some Nigerian banks have been raising funds to increase their capital base and also requesting approval from shareholders for fundraising.
Cardoso said that the CBN would direct banks to increase their capital to a level that would support the vision of a $1 trillion economy. He said that the CBN would also implement other measures to restore macroeconomic stability and address fundamental flaws.
