A financial expert, Dr. Samuel Nzekwe, says the Central Bank of Nigeria’s (CBN) new minimum capital requirement for Nigerian banks will enable them to finance more long-term loans.
Nzekwe, a former president of the Association of National Accountants of Nigeria (ANAN), made this assertion in an interview with the News Agency of Nigeria (NAN) on Friday in Ota, Ogun.
NAN recalls that the Acting Director of the Corporate Communications Department of the bank, Mrs. Hakama Sidi-Ali, announced on Thursday, in a statement, that the new minimum capital for merchant banks would be N50 billion.
Sidi-Ali also said that the new requirements for non-interest banks with national and regional authorizations are N20 billion and N10 billion, respectively.
For international authorization, it was raised from N100 billion to N500 billion.
All banks are required to meet the new capital requirements within 24 months, beginning from April 1 to March 31, 2026.
Nzekwe commended the CBN’s decision to increase the minimum capital base of Nigerian banks, saying that move would enable them to fulfil their role as financial intermediaries effectively.
“It is a positive step as it will enable banks to finance large-scale investments in the country.
“For the economy to grow, we need strong banks capable of providing long-term loans, which sometimes require 10 to 15 years for repayment or even offering a five-year moratorium,” he said.
The former ANAN president highlighted the current difficulty faced by banks in financing long-term loans or major projects.
Nzekwe expressed optimism that this development would prompt the apex bank to inject more funds into the financial system.
This, he explained, would encourage more borrowing from banks and therefore stimulate the growth of industries.
He commended the CBN Governor, Yemi Cardoso, for raising the minimum capital requirement for banks to a new level.
The financial expert noted that the apex bank had structured it in such a way that banks would not need to bring retained earnings to the capital base but generate new additional funds. (NAN)
