Financial experts have lauded the Central Bank of Nigeria (CBN) for its proposed plan to initiate another round of recapitalisation for Deposit Money Banks. The commendations came in separate interviews with the News Agency of Nigeria in Ota, Ogun State.
During the 58th Annual Bankers’ Dinner organized by the Chartered Institute of Bankers of Nigeria in Lagos, Mr Olayemi Cardoso, the CBN Governor, announced the central bank’s intention to enforce a new round of recapitalisation for commercial banks. This move echoes the last recapitalisation exercise in 2004, initiated by Charles Soludo, former CBN Governor, who raised the capital base of banks from N2 billion to N25 billion.
Dr Samuel Nzekwe, former President of the Association of National Accountants of Nigeria, welcomed the decision, attributing it to the country’s devalued currency due to rising inflation. He stressed the importance of recapitalisation, citing the high inflation rate, which might impact the banks’ ability to back financial obligations adequately. Nzekwe emphasized the need for banks to strengthen their capital base to cope with current challenges effectively.
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Similarly, Dr Titus Okunronmu, former Director of the Research Department at the CBN, endorsed the CBN’s initiative, considering it a positive step. He highlighted that recapitalisation would empower banks to provide more credit to the public and enhance their preparedness for future challenges.
Both experts agreed that the CBN’s move to bolster the capital base of banks was crucial to fortifying the financial sector and ensuring its resilience in a rapidly changing economic landscape.
