The Central Bank of Nigeria (CBN) initiated a comprehensive two-year bank recapitalisation exercise on April 1, 2024, set to conclude on March 31, 2026. Under the leadership of Governor Olayemi Cardoso, this ambitious program aims to significantly strengthen the resilience, stability, and long-term capacity of Nigeria’s financial system, enabling it to robustly support the nation's economic development and the Federal Government's target of a $1 trillion economy. The exercise is designed to cultivate bigger and more sophisticated banks capable of undertaking larger financial risks and navigating both domestic and external economic shocks.

As of March 6, 2026, the recapitalisation exercise is progressing steadily, with 30 banks having successfully met the new minimum capital requirements specific to their respective license authorisations. In a broader scope, all 33 banks have actively raised additional capital through diverse market instruments, including rights issues, initial public offerings (IPOs), and private placements, as part of this ongoing industry-wide program. While all 33 banks have raised capital, the CBN noted that not all have yet fully satisfied all the requirements, with the capital positions of the remaining institutions currently undergoing the apex bank’s routine verification process to confirm compliance within the stipulated timeline. Earlier, during the Monetary Policy Committee (MPC) meeting in February, it was reported that 20 of the 33 Nigerian banks had met the new minimum capital requirements, collectively raising N4.05 trillion.

The revised regulatory requirements necessitate a substantial increase in banks' capital bases. Commercial banks with international licenses are now required to hold a minimum capital of N500 billion, those with national licenses N200 billion, and regional licensees N50 billion. This represents a significant upward revision compared to previous requirements, such as the N25 billion minimum for commercial banks with international licenses. This strategic increase is vital for ensuring that Nigerian banks possess the robust capacity to absorb potential losses, enhance their liquidity positions, and effectively navigate periods of economic volatility.

The recapitalisation policy is lauded as a timely and essential initiative, poised to position the Nigerian financial system to meet the evolving demands of a growing and globally competitive economy. It is expected to bolster the banking sector's resilience against various economic shocks, including inflation, currency volatility, and global geopolitical disruptions. Stronger banks resulting from this exercise will be better equipped to finance Nigeria’s long-term economic transformation, supporting large-scale infrastructure projects, industrial development, and enabling access to credit for Micro, Small, and Medium Enterprises (MSMEs). This forward-looking strategy extends beyond mere regulatory compliance, aiming to empower Nigerian banks to operate at the scale and sophistication required to foster a trillion-dollar economy, supporting both traditional economic drivers like oil and gas, agriculture, and manufacturing, as well as emerging sectors such as fintech and green energy.

The CBN reiterates that the Nigerian banking system remains stable and sound. Key financial soundness indicators overwhelmingly satisfy prudential benchmarks; for instance, the non-performing loan ratio remains within the prudential benchmark of five per cent, and the banking sector liquidity ratio comfortably exceeds the regulatory floor of 30 per cent, ensuring banks maintain adequate cash flow. Recent stress tests further reaffirm the continued strength and robustness of the banking system. The CBN is also transitioning to Basel III, which will further enhance resilience, improve capital quality, and strengthen liquidity monitoring. The apex bank assures continuous close supervisory engagement with all regulated institutions to ensure full compliance with prudential and capital requirements.

A critical aspect of the recapitalisation program is the rigorous verification process for newly raised equity funds. Beyond just raising capital, banks are required to subject these funds to capital verification by a tripartite committee. This committee includes representatives from the CBN, the Securities and Exchange Commission (SEC), and the Nigeria Deposit Insurance Corporation (NDIC), tasked with scrutinizing new funds before the clearance of allotment proposals and the release of funds to the banks. The CBN's leadership is committed to fostering a strong culture of compliance and strengthening risk management frameworks across the sector, ensuring a transparent and resilient financial system.

This bank recapitalisation program is integrated into broader major policy shifts undertaken by the Nigerian government and the CBN, yielding positive results for the economy. These reforms include forex market adjustments, the removal of petrol subsidies, fiscal consolidation efforts, and tax reforms designed to plug leakages, expand fiscal space at sub-national levels, and ignite regional competition. The CBN emphasizes strong monetary and fiscal policy coordination, exemplified by the discontinuation of direct deficit financing, signaling a firm commitment to fiscal discipline. This strategic alignment aims to strengthen Nigeria's macro-stability, reduce domestic borrowing costs, improve liquidity conditions, and ultimately deliver durable price stability.

Expert opinions underscore the significance of this exercise. Matthew Verghis, Country Director of the World Bank in Nigeria, highlighted recapitalisation as a tool for economic transformation. Oliver Alawuba, Group Managing Director of United Bank for Africa (UBA), described the policy as timely and essential for positioning the financial system. Ayokunle Olubunmi, Head of Financial Institutions Ratings at Agusto & Co, noted that many banks have already secured the required funds, awaiting final CBN verification. Prof. ‘Abiodun Adedipe, Chief Consultant of B. Adedipe Associates Limited, identified bank recapitalisation as a key policy shift creating stronger banks capable of funding Nigeria's $1 trillion economy. With projections of not less than N6 trillion to be raised by all banks by the exercise's conclusion, the gains are expected to linger for decades, significantly accelerating Nigeria’s journey toward a more competitive and sustainable economy.