with the successful conclusion of the 24-month recapitalisation programme on March 31, producing currently, 33 banks that have met the revised minimum capital requirements, Central Bank of Nigeria (CBN) may have opened the floodgate for the lenders to make history in the areas of innovations, ultimately, becoming the engine room for Nigeria’s growth and development.
Also, while Nigerians wait with bated breath for the banjs to unleash credit facilities to the private sedtor operatives as well as the small and medium-sized enterprises, Keystone, Polaris, and Union banks, will have to wait a while for legal fireworks and high-level boardroom, political decisions for their eventual survival.
From all indications and particularly, based on capital adequacy, the recapitalised banks may have qualified for big ticket businesses as well as being capable of contributing meaningfully to the economic growth and aspirations of successive governments.
But while the exercise has produced about 33 lenders that have raised collective sum as much as N4.61 trillion, according to official figures, Nigerians are equally worried about the three, still under the supervision of CBN, even as their market share and fortunes have decreased over the past few years.
Also, the lenders are currently under pressure to meet an April 30 deadline set by CBN to submit Board-approved Risk-Based Capital (RBC) stress test reports, marking a tougher phase of oversight after the industry’s recapitalisation exercise.
The directive, issued March 6, 2026 requires banks to assess how their capital positions would hold up under adverse credit scenarios, detailing execution methodology, regulatory compliance and capital implications. The move signals a shift from measuring the size of capital to testing its resilience.
CBN, had, through a statement jointly signed by Olubukola A. Akinwunmi, director of Banking Supervision, and Hakama Sidi Ali, acting director of Corporate Communications, said the policy is aimed at “safeguarding the gains of the just concluded recapitalisation exercise,” adding that it has strengthened its risk-based capital adequacy framework by requiring banks to “conduct regular stress testing across defined scenarios and maintain appropriate capital buffers.”
The Central Bank said the framework will be supported by periodic reviews of prudential guidelines and supervisory processes to reinforce governance, risk management and overall sector resilience.
The new regime builds on provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020 and supplements the 2019 stress testing guidelines, extending rigorous assessment across all on- and off-balance sheet credit exposures.
READ ALSO:Plateau Attack: Governor Claims Community, Security Operatives Blindsided
Metrobusinessnews.com (MBN) gathered that CBN intends to interogate sources of some of the funds raised for recapitalisation, noting that, while the March 31 rexercise focused on meeting minimum capital thresholds, the RBC directive goes further by interrogating the quality of that capital.
“The idea is that scaling the huddle through meeting or even exceeding the paid-up capital alone does not guarantee stability of the institutions and the system, but that the assets on which they stand must have to be interrogated and ascertained,” says an analyst.
Although CBN continues to vouch for stability of the system as the sector continues to maintain capital adequacy ratios above international Basel benchmarks, with minimum thresholds of 10 percent for regional and national banks and 15 percent for internationally licensed lenders, MBN gathered that the legal and regulatory hurdles of Keystone, Polaris and Union banks would indeed require some concessions on the part of government to avoid any possible political backlash.
This is even as some analysts say the stress tests could expose fresh capital gaps as well as loss-absorption capacity of the new capital against the realistic asset deterioration possibilities.
For instance, Union Bank has been plunged further into a deepening governance crisis after a court ruling, which overturned regulatory intervention, setting off a high-stakes legal battle that now pits investor rights against financial stability concerns in Africa’s most populous nation.
CBN has escalated its fight to retain control over the lender, filing an appeal against a March 25, 2026, judgment of the Federal High Court in Lagos that nullified its 2024 takeover of the bank and ordered the reinstatement of its former board and management.
CBN, in its appeal had maintained that Union Bank was grappling with a negative capital adequacy ratio, a capital shortfall exceeding N224 billion, and elevated non-performing loans at the time of the takeover—conditions it said posed risks not only to depositors but to the broader financial system.
Similarly, CBN, had in January 2024, when it dissolved the boards of the three banks , cited corporate governance lapses, regulatory breaches and what it described as deteriorating financial conditions, issues, which MBN, gathered, still persist.
In fact, further checks revealed that, the initial acquisition deals of the lenders were less than transparent considering the ignoble roles by CBN and the bad bank, the Assets Management Corporation of Nigeria, (AMCON).
With the high level of success of the recapitalisation exercise, the government is determined to ensure that no bank will be liquidated, and as such all possible options, including, political are, being explored to ensure that possible heating of the polity should be avoided.
“This is election period and I can assure you that, all issues, no matter how bad, will be resolved peacefully,” says an economist.
That intervention, however, triggered a backlash from core shareholders, including Titan Trust Bank Limited and affiliated entities, who challenged the move in court, arguing that the apex bank acted outside its statutory powers and diluted their ownership stakes without due process.
The ruling effectively unwinds nearly two years of regulatory control. It throws into question a recapitalisation process that had been underway, leaving Union Bank caught in a boardroom tussle.
Besides, some shareholders consider the action of CBN as an overreach as well as overbearing.
Boniface Okezie, national chairman of the Progressive Shareholders Association noted that CBN’s intervention was in bad taste, praising the judiciary for the judgement in the case of Union Bank.
However, at issue are the broader legal and policy questions about the limits of regulatory authority in Nigeria’s banking sector and the extent to which CBN can act unilaterally in times of financial stress.
For investors, the case raises concerns about the protection of shareholder rights and the predictability of regulatory actions. For regulators, it underscores the challenge of balancing market confidence with the need for swift intervention to prevent systemic crises.
With the appeal now underway, the outcome is likely to set a precedent that could reshape the relationship between regulators and financial institutions in Nigeria, determining how far authorities can go in stepping into troubled banks without triggering legal and investor backlash.
Others, however say, the judgement amounted to judicial over reach, challenging the mandate and core responsibilities of CBN, which they say could set bad precedent for resolving banking sector crisis in the future.
For, now, they said that the focus for banks, post recapitalisation programme, is shifting from raising capital to generating sustainable returns for shareholders.
Expectedly, this should involve expanding loan books, increasing revenue streams, and improving efficiency in deploying assets to drive stronger profitability.
But, they were unanimous in theur submissions on the need for the regulators to prioritise measures that reconnect the banking system to the real economy, through, for instance, incentivising long term financing as well as ensuring that monetary policy transmission leads to lower borrowing costs for businesses.
The tougher stance, they further argue, reflects Nigeria’s broader economic ambitions, as the authorities continue to push for a banking system capable of supporting large-scale infrastructure and industrial financing, with “bulletproof” balance sheets needed to sustain growth and absorb shocks as the country targets a $1 trillion economy by 2030.
With the RBC framework taking effect from April 1, the say, the message from regulators is clear: recapitalisation is no longer enough. Banks must now prove their capital can survive stress, fir ultimate contribution to growth and development through effective abd efficient financial intermediation
