In a move to fortify the nation’s banking sector, the Central Bank of Nigeria (CBN) has revealed its intentions to increase the capital base of banks operating in the country, News About Nigeria gathered.
This announcement was made by Dr. Olayemi Cardoso, the Governor of the CBN, during the 2023 Bankers’ Dinner held on Friday.
While acknowledging the existing stability in the banking sector, Dr. Cardoso said that Nigerian banks are currently not adequately capitalised to effectively cater to the needs of a $1 trillion economy, a goal set by the government.
He said, “Will Nigerian banks have sufficient capital relative to the finance system’s needs in servicing a one trillion dollar economy in the near future? In my opinion, the answer is no, unless we take action. Therefore, we must make tough decisions regarding capital adequacy. As a first step, the Central Bank will be directing banks to increase their capital.”
Dr Cardoso underscored the pivotal role of technology in delivering financial services and promoting financial inclusion.
He addressed concerns about certain financial institutions breaching their licenses by misusing technology for payment facilitation.
The CBN Governor warned that any intentional or unintentional non-compliance would face sanctions, stressing that operators must ensure their activities align with their licenses.
Moreover, he announced a comprehensive review of the licensing framework for payment services, involving extensive consultations to establish a regulatory and compliance framework suitable for the technology-driven payment services sector.
Dr Cardoso also weighed in on the previous restriction of 43 items from accessing foreign exchange (forex) through the investor’s and exporters’ (I&E) window.
He noted a 51% increase in trade evasion during the period when these items were restricted, resulting in an annual revenue drop of approximately $1.4 billion between 2015 and 2019.