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AfricaOctober 3 2004

Mixed reaction

Some bankers accept that, in the long run, a higher capital requirement is necessary to strengthen institutions. But some are unhappy about the impact on smaller banks and about the difficulties of raising capital.
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Nigerian bankers are increasingly resigned to the fact that Central Bank of Nigeria (CBN) governor Charles Soludo is unlikely to backtrack on his directive to banks to increase their minimum capital requirements from N1bn ($7.5m) N25bn by the end of next year. And, according to Godwin Oboh, managing director and chief executive of Union Bank of Nigeria, banks accept the merits of consolidation in the sector.

“We, as bankers, have come to agree that consolidation is a good thing for this country. In the end, we will have strong banks and the incidence of distress will be minimal or non-existent. We have all come to terms with it,” he told a press briefing following a Bankers Committee meeting.

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