Cbn new minimum capital requirement for banks
The Central Bank of Nigeria (CBN) has introduced a new minimum capital requirement for banks in Nigeria. The new requirement is aimed at strengthening the banking sector and enhancing its resilience to economic shocks.
As of 2022, the new minimum capital requirement for banks in Nigeria is as follows:
- Tier 1 capital: N50 billion (approximately $130 million USD)
- Tier 2 capital: N20 billion (approximately $52 million USD)
- Total capital: N70 billion (approximately $182 million USD)
The new minimum capital requirement is a significant increase from the previous requirement of N25 billion (approximately $65 million USD) for Tier 1 capital and N15 billion (approximately $39 million USD) for Tier 2 capital.
The CBN has also introduced a new capital adequacy ratio (CAR) requirement of 15% for banks, which is higher than the previous requirement of 10%. The CAR is the ratio of a bank's capital to its risk-weighted assets.
The new minimum capital requirement and CAR are designed to ensure that banks in Nigeria have sufficient capital to withstand potential losses and maintain stability in the financial system. The CBN has given banks until 2025 to meet the new minimum capital requirement and CAR.
It's worth noting that the CBN has also introduced other measures to strengthen the banking sector, including the introduction of a new risk-based supervision framework and the implementation of a stress testing framework.