As the banking sector recapitilisation sector draws near, many banks are racing to meet the March 31 deadline set by the Central Bank of Nigeria.
Checks by Daily Trust showed that although 32 banks have met the recapitalisation deadline, some are still discussing merger while others are under regulatory supervision.
Recall that the last time banking sector was recapitalised was during the tenure of Prof. Charles Soludo in 2004 when capital base of commercial banks was raised from N2 billion to N25 billion.
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Twenty-two years down the line, another round of recapitilisation beckons, as part of efforts to boost financial sector stability.
Meanwhile, available data showed that the total capital raised under the ongoing banking recapitalisation could rise to about N6 trillion as banks are still allowed a window of more than N1.5 trillion in pending capital raising deals, mostly set to materialise before the March 31, 2026 deadline.
Background
In March 2024, the CBN released its circular on review of minimum capital requirement for commercial, merchant and non-interest banks. The apex bank increased the new minimum capital for commercial banks with international affiliations, otherwise known as mega banks, to N500 billion; commercial banks with national authorization (N200 billion) and commercial banks with regional license (N50 billion).
Others included merchant banks (N50 billion); non-interest banks with national license (N20 billion) and non-interest banks with regional license will now have N10 billion minimum capital. The 24-month timeline for compliance ends on March 31, 2026.
Under the new minimum capital base, CBN uses a distinctive definition of the new minimum capital base for each category of banks as the addition of share capital and share premium, as against the previous use of shareholders' funds.
The recapitalisation exercise, which began in early 2024, forms part of broader reforms aimed at building a more robust and shock-resistant banking sector. The goal is to ensure that Nigerian banks are sufficiently capitalised to absorb economic pressures and support long-term growth.
Mergers imminent
Meanwhile, the Central bank Governor, Mr. Olayemi Cardoso has hinted that the March 31, 2026 deadline might not apply to the three banks under its regulatory intervention. These include Polaris Bank, Union Bank of Nigeria and Keystone Bank.
Cardoso who spoke to the media at the last Monetary Policy Committee meeting in February noted that such institutions might not follow the same recapitalisation timeline because of legal and structural issues affecting them.
Cardoso said: "We remain actively engaged with all relevant stakeholders to ensure that they have an orderly and credible outcome while maintaining financial stability."
He added that a total verified and approved capital raised by banks stood at N4.05 trillion as at February 19, 2026. Also, a total of N2.90 trillion or 71.6 per cent came from within Nigeria while $706.84 million, equivalent to N1.15 trillion or 28.33 per cent, came from foreign investors.
32 banks fully compliant
At the just concluded Monetary Policy Forum, the CBN governor affirmed that 32 banks had fully met their new minimum capital requirements ahead of the March 31.
He said, "The banking sector recapitalisation programme has recorded commendable progress, with 32 banks having already met the revised capital requirements. This achievement has significantly strengthened the resilience and capacity of the Nigerian banking system, positioning it to effectively mobilise long-term capital, support productive investment, and play its critical role in enabling the transition towards a $1.0tn economy."
Checks on the website of the CBN indicated that there are 36 deposit money banks as of April 26, 2024. They included seven with international authorisation. They are Access Bank Limited, Fidelity Bank, First City Monument Bank Limited, FirstBank Nigeria Limited, Guaranty Trust Bank Limited, United Bank for Africa and Zenith Bank PLC.
Those holding commercial banking license with international authorisation are Citibank Nigeria Limited, Ecobank Nigeria Limited, Heritage Bank, Globus Bank, Keystone, Polaris, Stanbic IBTC Bank, Standard Chartered Bank, Sterling Bank, Titan Trust Bank, Union Bank, Unity Bank, Wema Bank, Premium Trust Bank and Optimus Bank.
Commercial Banks with Regional Authorisation are Providus Bank, Parallex Bank, SunTrust Bank and Signature Bank.
For the non-interest banks, there are Jaiz Bank, Taj Bank, Lotus Bank and Alternative Bank Limited.
Deadline non-negotiable
Cardoso reiterated that the March 31 deadline is non-negotiable. He said the CBN remains fully engaged with stakeholders to ensure the process concludes in an orderly, transparent and credible manner.
According to him, the central bank will continue to monitor progress closely and enforce regulatory standards to preserve the stability and integrity of the banking system. With just weeks left, attention now turns to the remaining banks and whether they can close the gap in time.
Operators speak
The Group Managing Director of United Bank for Africa (UBA), Oliver Alawuba recently described the ongoing CBN bank recapitalisation policy as both timely and essential in positioning the financial system to meet the demands of a growing and globally competitive economy.
According to Alawuba, the initiative is expected to boost the resilience of the banking sector by strengthening its capacity to withstand economic shocks such as inflation, currency volatility and global geopolitical disruptions.
He noted that the policy will also place Nigerian banks on a stronger footing to finance the country's long-term economic transformation, including funding of large-scale infrastructure and industrial projects.
Alawuba further stressed that the recapitalisation policy goes beyond regulatory compliance. It is a forward-looking strategy aimed at equipping Nigerian banks to operate at the scale and sophistication required by a trillion-dollar economy.
He said the move would enhance the sector's ability to support traditional economic drivers such as oil and gas, agriculture and manufacturing, as well as emerging sectors such as fintech, green energy and infrastructure development.
"Nigerian banks need adequate capital buffers to meet the evolving demands of these sectors. Without this, the industry cannot effectively rise to the challenge," he said.
Why recapitalisation is critical
In 2024, net domestic credit by banks stood at N105.88 trillion. Personal and private sector loans stood at N470 billion in the fourth quarter Q4 2024, according to CBN. And up to September 2024, 90 percent of loans were reportedly issued by microfinance banks.
Manufacturers accessed N68.7 trillion bank loans between January and September, 2025 and it was noted that the economy grew by 4.25 percent in Q2 2025 which was said to be the strongest pace in four years and was partly driven by financial services and the telecommunication sectors.
Experts have noted that a banking crisis occurs on the average once every 20 to 25 years and that higher capital base and liquidity requirements reduce the rate of bank failure.
...Banks must be connected to real sectors - CPPE
Meanwhile, the Centre for the Promotion of Private Enterprises (CPPE) has commended the recapitalisation exercise that's about to be completed.
In a statement on Sunday, Executive Director at CPPE, Dr. Muda Yusuf, however noted that while the recapitalisation is concluded, banks must be connected to real sectors of the economy.
"This marks a significant milestone in the ongoing effort to strengthen the resilience, stability and capacity of the Nigerian banking system.
"The exercise has been notably orderly, non-disruptive and confidence-enhancing. Evidence indicates that 32 banks have already met the new minimum capital requirements as at Friday 27th March 2026, with no reports of depositor losses, forced mergers, job losses or erosion of shareholder value.
This marks a significant improvement over past consolidation episodes and reflects stronger regulatory capacity, improved market discipline and greater resilience within the banking system " the CPPE said
Speaking further, Yusuf emphasised that "However, while recapitalisation has significantly strengthened the capacity of banks to absorb shocks, support large-ticket transactions and enhance financial system stability, the critical question now is whether this stronger banking system will sufficiently support the real economy. The evidence suggests that this linkage remains weak.
"Private sector credit as a percentage of GDP in Nigeria is still only about 17% as of 2025, compared to a sub-Saharan African average of about 25% and approximately 34% for lower-middle-income countries. Peer economies such as South Africa (57.5%), Mauritius (69.8%) and Cape Verde (66.3%) demonstrate significantly stronger financial intermediation.
This gap underscores a persistent structural disconnect between the financial system and productive sectors of the economy," he added.
He noted that there are also important structural concerns regarding the nature and distribution of credit in the economy.
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"A large proportion of bank lending remains short-term in nature. Credit with maturity of less than one year accounts for about 55% of total credit, while long-term credit (above three years) accounts for only about 25%. This structure is not aligned with the financing needs of critical sectors such as manufacturing, agriculture, infrastructure and real estate.
In addition, the sectoral allocation of credit remains skewed. The services sector accounts for about 55% of total credit, while manufacturing receives about 14% and agriculture just 5%. This pattern is inconsistent with Nigeria's aspirations for economic diversification, industrialisation and job creation."
Also reacting, an economist, Prof. Uche Uwaleke noted that it's fair to say the recapitalization exercise has largely been a success so far.
"With 32 out of 36 banks already meeting the new requirements according to the Central Bank of Nigeria, it reflects strong investor confidence and the sector's readiness to adjust to tighter prudential standards.
"Importantly, the process has also provided a significant boost to the capital market. Over N4 trillion has been raised so far, with roughly 28% coming from foreign investors. That level of participation not only supports bank balance sheets but also signals renewed external confidence in Nigeria's financial system and macroeconomic direction.
"It has, in turn, helped improve stock market performance and liquidity.
Looking ahead, the CBN will need to shift focus from capital raising to risk supervision," he saod
He further noted that key areas to watch include potential overexposure to high-risk sectors, governance lapses arising from rapid capital inflows, and the temptation for aggressive lending that could weaken asset quality.
"There's also the broader macro risk especially exchange rate volatility and inflation, which could test the resilience these new capital buffers are meant to provide.
"My advice to the CBN would be to consolidate the gains by strengthening supervisory oversight, enforcing strict corporate governance standards, and ensuring that this new capital translates into productive lending rather than speculative activity. The real success of this exercise will ultimately be measured by its impact on economic growth and financial stability, not just the amount of capital raised."
