By Ayobami Oyalowo

NIGERIA’S banking sector is undergoing its most consequential transformation since the 2004–2005 consolidation that reduced the number of banks from 89 to 25. At the centre of this shift is the Central Bank of Nigeria’s recapitalisation drive, which set a March 31, 2026 deadline for banks to meet sharply higher capital requirements—₦500 billion for international banks, ₦200 billion for national banks, and lower thresholds for regional lenders. Introduced in 2024, the policy has forced banks to raise fresh capital, attract strategic investors, merge with peers, and clean up their balance sheets. As of early 2026, 23 banks have already met the new thresholds through rights issues, mergers, and capital injections. The message from the regulator is clear: Nigerian banks must be strong enough to finance a bigger, more complex economy and resilient enough to withstand future shocks.

The timing is deliberate. Years of high inflation, rising interest rates, currency volatility, and persistent foreign exchange illiquidity have weakened capital buffers and constrained lending. Against this backdrop, CBN Governor Olayemi Cardoso has repeatedly linked recapitalisation to Nigeria’s ambition of becoming a trillion-dollar economy. Sustainable growth, he has argued, requires a financial system with the capacity to fund large-scale infrastructure, industrial expansion, and enterprise development—without putting stability at risk. But recapitalisation alone is not enough. Bigger banks that cannot reach more customers, lend more efficiently, or innovate faster will simply become larger versions of the old system. This is why the CBN’s open banking framework is the essential second half of the reform.

Approved in March 2023, open banking allows customers—once they give consent—to securely share their financial data with licensed fintech companies through standardised digital channels. In simple terms, the CBN is opening the banking system so financial services can reach people wherever they are, not just where bank branches exist. Traders can now access credit using transaction histories instead of collateral. Small businesses can receive faster loans and cheaper payment services. Individuals can manage multiple accounts and financial products from a single app. This reform is significant because millions of Nigerians remain outside formal financial services, while SMEs continue to face severe credit constraints. Open banking enables data-driven lending and payments, allowing banks to reach new customers more efficiently and safely—precisely the scale needed to justify the new capital being raised under recapitalisation. This shift is making finance more accessible and inclusive, but it is also strengthening the recapitalisation agenda. Banks that have raised new capital need safe and profitable ways to deploy it. Open banking gives them that pathway. By partnering with fintechs, banks can expand lending, acquire customers at lower cost, and serve previously excluded communities without heavy investment in physical infrastructure.

Capital becomes more productive, risks are spread more intelligently, and returns improve. Unsurprisingly, banks are responding. Institutions such as Wema Bank (through ALAT), Sterling Bank, GTCO, and Zenith Bank have opened API channels and invested in digital partnerships, while others are integrating with fintech platforms like Mono and OnePipe to extend services beyond their own apps. Mid-sized and large banks alike are accelerating digital transformation, launching digital subsidiaries, and redesigning their platforms into multi-service “super-apps” that blend banking with everyday services. Together, recapitalisation and open banking are reshaping Nigerian banking into a system that is stronger, more inclusive, and more competitive. Capital injections and mergers have restored stability, while open data and partnerships are unlocking innovation. A recapitalised bank in 2026 will not just hold more capital—it will be better at serving people, supporting businesses, and financing growth. If executed well, this reform cycle will be remembered as the moment Nigerian banking both strengthened and opened up—when the CBN rebuilt the sector’s foundations while ensuring that financial services reached more people, more efficiently, and at lower cost. That is how banking becomes not just safer but truly developmental.

Copyright © 2026 Nigerian Tribune Provided by SyndiGate Media Inc. (Syndigate.info).