CBN to increase banks’ recapitalisation ― Emefiele

NIGERIAN banks are to embark on a fresh round of capitalisation within the next five years.

Governor, Central Bank of Nigeria (CBN), Mr Godwin Emefiele who disclosed this while unveiling his agenda for his second term in office on Monday said details of the recapitalisation would be worked out.

He recalled that when banks’ capitalisation was raised from N2 billion to N25 billion in 2006, it was the equivalent of $200 million.

With exchange rate currently at around 360 units to the dollar, however, Emefiele said the capitalisation had depreciated to less than $75 million.

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“Over the next five years banks would be required to hold higher capital,” he said, adding that foreign exchange depreciation had weakened the industry’s capitalisation.

The bank will discuss the plan at a committee of governors, Emefiele said, though he did not say when this would be.”

He also that current foreign exchange regime would be maintained.

“We would continue to operate a managed float exchange rate,” he said.

Last month, Emefiele became the first central bank governor to get a second term, after newly re-elected President Muhammadu Buhari nominated him, a sign of policy continuity.

The governor added that Nigeria’s pace of economic growth remains fragile, but the central bank would strive to decrease the inflation rate to single digits and maintain a positive interest rate.

He also noted that efforts would continue to increase financial inclusion to 90 per cent within his second five-year tenure