THE banks recapitalisation policy scheduled for March 2026, by the Central Bank of Nigeria, CBN, is a proactive and commendable policy which aims at enhancing the solidity of banks in driving the economy for greater impact in a globalised world with fast systemic interactions.
The financial system which is broadly segmented into the money market and capital market plays a central role in driving the economy. It mobilises funds from surplus ends to deficit ends for production, entrepreneurship, innovation, job creation and wealth creation. Harvard Economist, Dani Rodrik, had noted that the expansion of globalisation and movement of free capital flow were the reasons why economic crises have become more frequent in both developing and advanced economies alike.
The reform reduced corporate rascality in the banking industry as banks and other stakeholders became more compliant to regulatory requirements. It resulted in a sound and stable banking system, banks increased their capital base from $15 million to $200 million through injection of fresh capital, and mergers and acquisitions. CBN issues fresh foreign currency deposit guidelines
In developing countries, the bank is the most important financial intermediary which provides the major share of financial services. In Nigeria, banks dominate the financial system and CBN has continued to manage potential threats in the banking industry.