By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has directed deposit money banks (DMBs) in the country to expedite action to increase their capital base from the current N25 billion.
The Governor of the apex bank, Mr Olayemi Cardoso, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja.
At the meeting, which started the previous day, the MPC hiked the benchmark interest rate by 200 basis points from 22.75 per cent to 24.75 per cent.
The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.
Mr 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.”
Last November, Mr Cardoso hinted that the monetary authority would likely direct banks to increase their capital base in the coming months as part of a new policy push towards a $1 trillion Nigerian economy.
Mr Cardoso, said this while delivering his keynote address at the 58th Annual Chartered Institute of Bankers of Nigeria (CIBN) dinner in Lagos.
“We must make difficult decisions regarding capital adequacy. As the first steps, the CBN will be directing banks to increase their capital,” he said at the event, which was his first public appearance after he was confirmed for the position by the Senate.
The last time the CBN increased the capital base for banks was in 2005, when the current Anambra State Governor, Mr Charles Soludo, was the head of the apex bank. The central bank raised the capital base from N2 billion to N25 billion.