14 Banks Meet CBN’s New Capital Requirement as MPC Cuts Interest Rate to 27%

Abuja — Governor of the Central Bank of Nigeria (CBN), Mr. Yemi Cardoso, yesterday disclosed that 14 banks have fully met the new capital requirement under the ongoing recapitalisation exercise.

Cardoso made this known while presenting the communiqué from the 302nd meeting of the Monetary Policy Committee (MPC) in Abuja. He said members of the committee commended the progress so far and urged the apex bank to sustain policies that would ensure the successful completion of the recapitalisation exercise.

The CBN had earlier introduced new minimum capital base requirements for banks, with thresholds set according to licence type. Commercial banks with international authorisation are now required to hold N500 billion, those with national authorisation N200 billion, while regional banks are to maintain N50 billion. Merchant banks and non-interest banks were also given new benchmarks of N50 billion, N20 billion and N10 billion depending on their scope of operation.

This marks the most significant reform since the 2004 recapitalisation exercise, which raised the minimum capital base from N2 billion to N25 billion, reducing the number of banks from 89 to 25 through mergers and acquisitions.

Meanwhile, the MPC also announced a 50 basis point reduction in the Monetary Policy Rate (MPR), lowering it from 27.5 per cent to 27 per cent. The standing facilities corridor was adjusted to +250/-250 basis points, while the Cash Reserve Ratio (CRR) for commercial banks was reduced from 50 per cent to 45 per cent. The CRR for merchant banks was retained at 16 per cent, and the Liquidity Ratio held steady at 30 per cent.

In a new policy move, the MPC introduced a 75 per cent CRR on non-Treasury Single Account (TSA) public sector deposits to improve liquidity management.

Cardoso explained that the decision to cut the MPR was predicated on sustained disinflation over the past five months, projections of further decline in inflation for the rest of 2025, and the need to support economic recovery.

He expressed satisfaction with prevailing macroeconomic stability, citing improvements in output growth, stable exchange rates, robust external reserves, and a surplus in the current account balance.

As of September 11, 2025, Nigeria’s external reserves stood at $43.05 billion, up from $40.51 billion at the end of July, representing an import cover of 8.28 months. The second quarter current account balance recorded a surplus of $5.28 billion compared to $2.85 billion in the first quarter.

Cardoso, however, cautioned that despite consistent deceleration in inflation, excess liquidity in the banking system remained a concern due to increased fiscal releases from improved revenues. He assured that the CBN would continue to act to preserve macroeconomic stability and safeguard financial sector resilience.