With two months until the year-end deadline for Nigerian banks to meet new minimum capital requirements, central bank governor Charles Soludo has declared the process on track and on time.
In a July 2004 announcement that rocked the industry, Mr Soludo ordered banks to increase their minimum shareholder capital from N2bn ($15m) to N25bn, a move that is designed to cull the country’s numerous weak, under-capitalised banks and trigger the formation of a competitive banking sector that could contribute more effectively to Nigeria’s economic development. At the time, just two banks out of 89 licensed institutions had capital bases of more than N25bn: Union Bank and First Bank.