CBN urges banks to turn N4.65tn capital into productive loans

The Central Bank of Nigeria (CBN) has called on banks to transform the N4.65tn raised under the recapitalisation programme into productive loans that bolster businesses, infrastructure, and overall economic growth. Dr Muhammad Abdullahi, the Deputy Governor of Corporate Services at the CBN, made this statement during the 38th Seminar for Finance Correspondents and Business Editors in Abuja.

He emphasized that the success of the recapitalisation exercise should be measured not only by the amount of capital raised but also by how stronger balance sheets translate into productive lending and enhanced services. Abdullahi highlighted that agriculture, manufacturing, services, and infrastructure require financing tailored to their cash flows and investment horizons, while smaller firms and households need dependable payments, suitable products, and fair treatment.

By the end of the two-year recapitalisation programme announced in March 2024, 33 banks met the revised minimum capital requirements and raised a combined N4.65tn, thus enhancing the banking system's capacity to support larger financing needs as the economy expands. Abdullahi linked stronger bank capital to Nigeria's goal of building a $1tn economy by 2030, stressing that lenders must mobilise and allocate capital on a larger scale.

He cautioned that raising capital is merely the beginning, emphasizing the importance of improved governance, risk management, cybersecurity, data protection, and business continuity arrangements. The apex bank will continue to monitor governance, asset quality, liquidity, and large exposures while expecting banks to strengthen their cybersecurity measures.