The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has stated that the capitalisation of banks in the country is a very crucial necessity for the country’s economy, News About Nigeria reports.
The CBN Governor made this disclosure while speaking at the Nigeria Sustainability Summit 2023 event at Access Bank Towers in Lagos on Tuesday, with the theme, ‘Crisis-resilient and new Nigerian economy’.
According to him, if the banks are ready to support the economy, then they must be ready to increase their capital.
The governor, who was ably represented at the summit by the Director of Financial Policy and Regulation, Haruna Mustafa, further noted that the country is currently facing macroeconomic challenges, which ran a little deeper in 2023.
He added that to be able to absorb the impact of the losses that came unexpectedly and at the same time lend their support to President Bola Tinubu’s agenda to build a $1 trillion economy that will also be rooted in sustainable principles, the banks must consider capitalisation more deeply.
He stated that some banks have formed the habit of breaching some of the metrics like single obligor limits that are part of the prudential guidelines to check banks’ risk exposures, noting that the banking sector had begun practising banking principles that were sustainable 10 years ago as a voluntary initiative.
He, therefore, urged that the capitalisation regulation be given more thought, noting that this was in the interest of the long-term sustainability of the industry.
He added that climate risks pose a lot of threats to the stability of the financial system.
