The Corporate Affairs Commission (CAC) has released new guidelines to facilitate the ongoing recapitalization process for deposit money banks in Nigeria. This directive, issued under Section 8(1)(e) of the Companies and Allied Matters Act No. 3 of 2020, aims to streamline procedures for new incorporations, share capital increases, mergers, and license authorization changes.
Key Points of the CAC Guidelines:
- New Incorporations:
- Submit an approved name reservation.
- Provide approval-in-principle from the sector regulator.
- Complete the online incorporation form.
- Pay stamp duty and filing fees.
- Certificate of incorporation issued within 24 hours for compliant applications
- Share Capital Increase:
- Submit the company resolution, return of allotment, and directors’ declarations.
- File a notice of the regulatory approval requirement.
- Provide an amended memorandum of association.
- Pay stamp duties and filing fees.
- Certificate of increase issued within 24 hours of regulatory approval filing
- Mergers for Small and Medium Banking Institutions:
- Submit special resolutions from merging companies.
- Provide an SEC-approved merger scheme.
- Submit court orders for extraordinary general meetings.
- Provide evidence of meeting publications.
- Submit a court order sanctioning the merger scheme.
The CAC emphasises that all annual returns and information on persons with significant control must be up-to-date. For inquiries and complaints, stakeholders can contact bankrecapitalization@cac.gov.ng or call +234 816 920 9551.
Background: In March 2024, the Central Bank of Nigeria (CBN) mandated a significant increase in the capital base of all banks to enhance productivity and stability in the financial sector. The new requirements are:
- International banks: N500 billion
- National banks: N200 billion
- Regional banks: N50 billion
Banks have initiated public offers and rights issues to meet these targets within the two-year timeframe set by the CBN.
This recapitalization effort aims to strengthen Nigeria’s banking sector, improve financial stability, and boost economic growth. The CAC’s new guidelines are designed to ensure a smooth and transparent process for banks to meet these regulatory requirements.