Economy
CBN introduces N500bn, N200bn minimum capital base for banks
Days after urging Nigerian banks to expedite action on the recapitalisation of their capital base in order to strengthen the financial system, the Central Bank of Nigeria (CBN) on Thursday, March 28, 2024, unveiled new minimum capital requirements for banks, pegging the minimum capital base for commercial banks with international authorisation at N500 Billion.
Confirming this in Abuja, on Thursday, March 28, 2024, the Acting Director, Corporate Communications Department, Mrs. Hakama Sidi Ali said the new minimum capital base for commercial banks with national authorisation is now N200 Billion, while the new requirement for those with regional authorization is N50 Billion.
Mrs. Sidi Ali also disclosed that the new minimum capital for merchant banks would be N50 Billion, while the new requirements for non-interest banks with national and regional authorisations are N20 Billion and N10 Billion, respectively.
A circular signed by the Director, Financial Policy and Regulation Department, Mr. Haruna Mustafa, to all commercial, merchant, and non-interest banks and promoters of proposed banks emphasized that all banks are required to meet the minimum capital requirement within 24 months commencing from April 1, 2024, and terminating on March 31, 2026.
According to the circular, the move, initially disclosed by the CBN Governor, Olayemi Cardoso, in his address to the Annual Bankers’ Dinner in November 2023, was to enhance banks’ resilience, solvency, and capacity to continue supporting the growth of the Nigerian economy.
To enable them to meet the minimum capital requirements, the CBN urged banks to consider inject fresh equity capital through private placements, rights issues and/or offers for subscription; Mergers and Acquisitions (M&As); and/or upgrade or downgrade of license authorisation.
Furthermore, the circular disclosed that the minimum capital shall comprise paid-up capital and share premium only. It stressed that the new capital requirement shall not be based on the Shareholders’ Fund.
“Additional Tier 1 (AT1) Capital shall not be eligible for meeting the new requirement. Notwithstanding the capital increase, banks are to ensure strict compliance with the minimum capital adequacy ratio (CAR) requirement applicable to their license authorisation.
“In line with extant regulations, banks that breach the CAR requirement shall be required to inject fresh capital to regularise their position,” it added.
The CBN circular said the minimum capital requirement for proposed banks shall be paid-up capital, adding that the new minimum capital requirement shall apply to all new applications for banking licenses submitted after April 1, 2024.
It noted that the CBN would continue to process all pending applications for banking licenses for which a capital deposit had been made and/or an Approval-in-Principle (AIP) had been granted. However, it said that the promoters of such proposed banks would make up the difference between the capital deposited with the CBN and the new capital requirement no later than March 31, 2026.
Meanwhile, the CBN said all banks are required to submit an implementation plan (clearly indicating the chosen option(s) for meeting the new capital requirement and various activities involved with their timelines) no later than April 30, 2024. The CBN also disclosed that it would l monitor and ensure compliance with the new requirements within the specified timeline.
Black Market Dollar (USD) To Naira (NGN) Rate As Of December 18, 2024Wondering about the current Dollar to Naira exchange rate at the black market, also known as the parallel market? Here’s the latest update for December 17, 2024, along with the rates for buying and selling US dollars in the Nigerian black market.
How Much is a Dollar to Naira Today in the Black Market?
As of Tuesday, December 17, 2024, the exchange rate at the Lagos parallel market (Black Market) stands as follows:
•Buying Rate: N1665
•Selling Rate: N1675
These rates reflect what buyers and sellers are willing to trade US dollars for in the black market. However, please keep in mind that these rates are subject to change and can fluctuate based on supply and demand.
Dollar to Naira Black Market Rate – December 17, 2024
•Buying Rate: N1665
•Selling Rate: N1675
Dollar to Naira CBN Rate Today
The official Central Bank of Nigeria (CBN) rates differ from those in the black market. For today, the CBN exchange rate for the Dollar to Naira is:
•Highest Rate: N1555
•Lowest Rate: N1520
It’s important to note that the Central Bank of Nigeria (CBN) does not endorse the black market exchange rate. The CBN encourages individuals to conduct their foreign exchange transactions through approved channels, such as commercial banks and licensed Bureau De Change (BDC) operators.
Please be aware that the exchange rates for buying or selling foreign currency may differ from the values listed here, as they can vary throughout the day. Always confirm rates with your local dealers before making any transactions.
The exchange rate for the Dollar to Naira in the black market (parallel market), also known as the “Aboki FX” rate, is as follows for 15th December 2024:
•Buying Rate: ₦1,660
•Selling Rate: ₦1,670
This rate reflects the price at which traders in the Lagos parallel market (black market) are buying and selling dollars, as reported by sources at Bureau De Change (BDC).
It is important to note that the Central Bank of Nigeria (CBN) does not officially recognize the parallel market and encourages individuals to conduct foreign exchange transactions through authorized banks.
Central Bank of Nigeria (CBN) Rate for Dollar to Naira
•Highest Rate: ₦1,549
•Lowest Rate: ₦1,520
The rates you receive may vary slightly from those mentioned here, as forex prices fluctuate based on market conditions.
CBN Takes Tough Action on New Naira Notes
In another development, the Central Bank of Nigeria (CBN) has imposed a ₦150 million fine on commercial banks found guilty of supplying newly minted naira notes to currency hawkers. This move is part of the CBN’s ongoing efforts to prevent the illegal trade of naira notes and ensure proper circulation to the public.
The penalty comes as the CBN reaffirmed the continued validity of the old ₦1,000, ₦500, and ₦200 notes following a Supreme Court ruling on November 29, 2023. The CBN also warned against the hoarding of cash, which disrupts the smooth flow of money in the economy.
The Nigerian National Petroleum Company Limited, NNPCL, has reduced the price of Premium Motor Spirit (petrol) across its retail outlets in the Federal Capital Territory, Abuja.
According to a reporter from Dailypost who visited NNPCL retail outlets observed that the petrol pump price was reduced from N1,060 to N1,040 per litre. This represents a reduction of N20.
“The price was reduced to N1,040 per litre from N1,060 on Saturday morning,” a filling station attendant at the NNPCL retail outlet along Kubwa expressway said.
A motorist, Ezekiel Njoku, confirmed the development.
“The reduction of N20 is significant. We need further fuel price reductions in the coming days,” he said.
With the price cut, Nigerians will now buy petrol at N1,040 per litre at NNPCL filling stations, while prices remain within N1,115 per litre at other filling stations, depending on the location.
This development comes barely three weeks after the state-owned Port Harcourt refinery began producing petroleum products in November 2024.
The former Managing Director of NNPCL Retail, Prof. Billy Okoye, had earlier speculated that a fuel price reduction was imminent with the commencement of production at the Port Harcourt refinery.
Oil marketers, the Independent Petroleum Marketers Association of Nigeria, IPMAN, and the Petroleum Products Retail Outlets Owners Association, PETROAN, had also hinted that the deregulation of the sector—coupled with the operations of Dangote and Port Harcourt refineries—would lead to a drop in petrol prices.
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