Senator Osita Izunaso, Chairman of the Senate Committee on Capital Market, has raised concerns about the unique risks associated with the recent bank capitalization, particularly when banks opt for private placement.
The Central Bank of Nigeria (CBN) recently unveiled new guidelines on bank recapitalization, stipulating that commercial banks with international authorization must increase their capital base to N500 billion, while national banks must raise theirs to N200 billion.
In a statement issued yesterday, Senator Izunaso highlighted the need for the CBN to ensure that funds obtained through illegal means are not used for bank recapitalization and that only suitable individuals become significant shareholders. He emphasized that the risk is minimized when banks undergo the stock market route, as it provides an additional layer of scrutiny alongside that conducted by the CBN.
Senator Izunaso praised the CBN for its recapitalization program and pledged the support of his committee in ensuring its successful implementation. He commended the adoption of tiered minimum capital requirements based on international, national, and regional authorization, contrasting it with the uniform capital base of N25 billion used in the 2005 banking recapitalization exercise.
