Overview

The Central Bank of Nigeria (CBN) has developed a contingency plan for banks that are weak and unable to meet the mandatory N25 billion capital requirement ahead of the banking sector consolidation deadline. CBN Governor Prof. Charles Soludo disclosed this at a press briefing on November 14, 2005, following a meeting with chairmen and chief executives of affected banks. The plan aims to ensure a safe landing for these banks, with measures including a deadline for the Alliance Bank Group (comprising nine banks) to finalize a merger resolution by end of November 2005, submission of licenses by December 7, 2005, and evaluation of proposals by December 14, 2005. Prof. Soludo assured depositors that no one would lose their money even if a bank fails to meet the capital requirement by December 31, 2005, as the CBN would take steps to ensure prompt repayment. He also noted that two other banks have submitted proposals to meet the requirements independently, and that recapitalization can only occur through foreign funds or director contributions, ruling out capital market fundraising.

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