How the New CBN Capital Requirement from Banks Affects the Common Man

The Central Bank of Nigeria has introduced significantly higher minimum capital requirements for banks as part of a major recapitalisation and financial stability reform.

Under the new tiered capital regime—which banks must meet by March 31, 2026—commercial banks with an international licence are required to have a minimum capital base of ₦500 billion; those with a national licence must hold ₦200 billion, while regional commercial banks are required to maintain ₦50 billion. Merchant banks (national) must meet a ₦50 billion threshold, non-interest banks (national) must hold ₦20 billion, and non-interest banks (regional) must have ₦10 billion. This represents increases of up to 900 percent in capital requirements for some categories compared with previous benchmarks.

The objectives of these reforms include building stronger capital buffers within Nigeria’s banking system, improving risk management and solvency, ensuring banks can absorb economic shocks while supporting lending to the real economy, and reducing systemic risk to prevent failures similar to those experienced in recent years.

For the average Nigerian, the Central Bank’s new capital requirement will not cause any immediate disruption. However, its effects will be felt gradually and largely behind the scenes.

First, money deposited in banks becomes safer. When banks are required to hold more capital, they have a stronger financial cushion. If the economy faces difficulties or a bank incurs losses, it is better positioned to absorb the shock without collapsing. This reduces the risk of deposit losses or sudden bank failures for customers.

Second, stronger banks can lend more responsibly. Well-capitalised banks are better able to extend credit to businesses, traders, farmers, and manufacturers. Over time, this can support business growth, job creation, and improved incomes. In the short term, however, some banks may become more cautious and tighten lending as they focus on raising capital.

Third, bank charges may rise slightly. As banks raise billions of naira in fresh capital, some may attempt to offset costs by increasing fees, reducing free services, or tightening loan conditions. This could affect customers through higher charges on transfers, ATM usage, or account maintenance, although competition among banks may limit the extent of these increases.

Fourth, some banks may merge or exit the market. Smaller or weaker banks that cannot meet the new requirements may merge with stronger institutions or shut down entirely. For customers, this could result in changes to bank names, account numbers, or branch locations, but deposits are generally protected and customers are rarely left stranded.

Fifth, access to loans may improve in the long run. While loans may initially become harder to obtain—especially for individuals and small businesses—a stronger banking system should eventually provide more stable and sustainable credit, rather than risky lending that collapses during economic stress.

In summary, the common man may experience minor inconveniences in the short term, but the broader objective is long-term financial stability. The Central Bank aims to ensure that when Nigerians save money, take loans, or rely on banks for daily transactions, they are dealing with institutions that are strong, reliable, and built to last.Put simply, you may not feel the impact today, but it is designed to protect you tomorrow.