|By Adekunle Adejumo-
CBN Warns Banks Against Dirty Capital in Recapitalisation Drive
Apex Bank Enforces Strict Verification to Shield Financial System from Illicit Funds
The Central Bank of Nigeria (CBN) has issued a strong warning to deposit money banks, cautioning them against sourcing capital from illicit channels during the ongoing recapitalisation exercise. The apex bank said any breach could destabilise the financial system and undermine the integrity of the banking sector.
Speaking at the 36th Finance Correspondents Association of Nigeria (FICAN) and Business Editors seminar held in Abuja on Monday, Dr. Olubukola Akinwunmi, Director of Banking Supervision at the CBN, stressed that the regulator would implement stringent verification measures to block illegal inflows.
“We ensure there is proper verification. And the verification is to ensure that we do not encourage illicit funds into our banking system. Illicit funds can only destabilise the banking system,” Akinwunmi said.
The recapitalisation initiative, which kicked off on April 1, 2024, is set to run for 24 months and aims to boost banks’ capacity to support the federal government’s ambition of achieving a $1 trillion economy.
Under the new capital structure:
-
International commercial banks must raise their minimum capital to ₦500 billion
-
National banks to ₦200 billion
-
Regional banks to ₦50 billion
Akinwunmi stated that the recapitalisation plan was not only a response to regulatory updates but also a forward-looking strategy to equip banks for emerging global economic shifts.
“The recapitalisation is also about strengthening the financial system for the future. Larger capital bases translate to greater capacity to fund high-impact sectors such as infrastructure, manufacturing, and agriculture,” he said.
Also speaking at the event, CBN Deputy Governor, Ms. Emem Usoro, emphasised the need for a solid financial sector to drive economic development and enhance global competitiveness.
“We must consider the recapitalisation of our banks to be able to fund, finance, and power the economy and favourably compete globally with its peers in other climes,” she remarked.
According to Usoro, the exercise is a proactive response to evolving global financial dynamics and a necessary step towards building a resilient and globally competitive financial ecosystem.
The CBN reiterated that banks may meet the new capital benchmarks through multiple options including mergers and acquisitions, public offers, and strategic foreign investments, as long as such moves remain transparent and within regulatory bounds.
