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- Lotus Bank, a non-interest bank, has announced that it has met the new minimum capital requirement set by the CBN
- The bank disclosed that it already had the amount as a national bank before the CBN’s announcement
- CBN increased the capital base for non-interest banks to N20 billion, while regional banks increased it to N10 billion.
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
One of Nigeria’s non-interest banks, Lotus Bank Limited, said it met the Central Bank of Nigeria’s new minimum capital requirement even before the apex bank raised the bar this year.
Isiaka Ajani-Lawal, the bank's executive director, who represented Kafilat Araoye, the managing director, announced that the bank already had the amount in its vaults even before CBN announced the new threshold.
Source: Getty Images
Lotus Bank announces its mission
CBN increased the capital base for non-interest banks to N20 billion, while regional banks to N10 billion.
The Executive Director noted that the bank is unique as a non-interest Nigerian bank that is deeply rooted in ethical banking and committed to ethical investing and prosperity.
He said Lotus Bank is committed to deepening financial inclusion and increasing the array of non-interest products available to Nigerians.
Vanguard reports that Lotus Bank's Sharia Auditor, Lukman Rajih, said the bank is in Nigeria to create value and growth for all via digital innovation despite religious differences.
CBN set new capital requirements for banks
Legit.ng earlier reported that the minimum capital required by banks operating in Nigeria has now been reviewed upward according to a directive by the apex bank.
The statement was signed by the director of the financial policy and regulation department, Haruna Mustafa.
In a statement to all commercial, merchant, and non-interest banks and promoters of planned banks, the bank allowed 24 months (starting on April 1, 2024, and ending on March 31, 2026) to comply with the new rule.
Based on the revised minimum capital base, commercial banks with international licenses must now achieve the N500 billion minimum capital requirement.
New requirement for regional banks
Similarly, the new criteria for individuals with regional authorisation is N50 billion, while the national authorisation is now N200 billion.
The Apex Bank also revealed that non-interest banks with national and regional authorisation must have N20 billion and N10 billion in capital, respectively. In contrast, merchant banks would need to have N50 billion.
The CBN asked banks to consider raising new equity capital through private placements, rights issues, subscription offers, mergers and acquisitions, and upgrading or downgrading licensing authorisation to help them meet the new minimum capital requirements.
Additionally, the apex bank stated that the new minimum capital would only include paid-up capital and share premium.
It emphasised that the Shareholders' Fund would not be the foundation for the increased capital requirement.
Nigerian banks raising capital ahead of CBN deadline
Legit.ng earlier reported that Large banks have sprung into action to fulfil the Central Bank of Nigeria's (CBN) new capital criteria. Four tier-one institutions aim to raise over N2 trillion in domestic and foreign capital.
To meet the CBN's ten-fold increase in minimum capital requirements, Zenith Bank Plc, the largest bank by market value, Access Bank, FBN Holdings, and Guaranty Trust Holding Company (GTCO) recently announced plans to raise extra capital.
Experts have hailed the move by the CBN, saying that the capital increase is long overdue.
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Source: Legit.ng
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