A commercial bank licence in Nigeria is the most comprehensive banking authorisation available. Commercial banks are licensed and supervised by the Central Bank of Nigeria (CBN) under the Banks and Other Financial Institutions Act 2020 (BOFIA) and the CBN's regulations on the scope of banking activities. A commercial banking licence permits a wide range of activities, including deposit-taking, lending, payments, trade finance and foreign exchange dealing as an authorised dealer.
Licence categories
Commercial banking licences are issued in three categories, based on geographic scope:
- International: operations in Nigeria and offshore through subsidiaries
- National: operations across all states of Nigeria
- Regional: operations within a limited number of states
The CBN also licenses merchant banks and non-interest banks as distinct categories.
Recapitalisation and minimum capital
In 2024, the CBN announced a recapitalisation programme requiring banks to raise their minimum capital, with a compliance deadline of 31 March 2026. Existing banks raised capital through rights issues, public offers, private placements and mergers, or adjusted their licence category. The new thresholds announced were:
| Licence | Minimum capital |
|---|---|
| Commercial bank, international | ₦500 billion |
| Commercial bank, national | ₦200 billion |
| Commercial bank, regional | ₦50 billion |
| Merchant bank | ₦50 billion |
| Non-interest bank, national | ₦20 billion |
| Non-interest bank, regional | ₦10 billion |
New applicants must meet the applicable threshold. The CBN specified how qualifying capital is measured, and applicants should confirm the current position and any further circulars.
Who can apply
Promoters may be Nigerian or foreign individuals and institutions, subject to fit-and-proper requirements. Foreign banks may establish subsidiaries, and investors may acquire existing banks, which requires CBN approval for the change of control.
How to get a commercial bank licence in Nigeria
Pre-application engagement
Promoters typically engage with the CBN before formal application to present the business case.
Approval-in-Principle
The formal application includes:
- Application fee and a capital deposit as required by the CBN
- Name reservation with the Corporate Affairs Commission
- Detailed business plan and feasibility study, including five-year projections
- Ownership structure down to ultimate beneficial owners
- Shareholder information, including source of funds and financial statements for corporate shareholders
- Board and management profiles with fit-and-proper documentation
- Corporate governance framework and board charters
- Risk management, compliance, AML/CFT, IT, information security and consumer protection frameworks
- For foreign promoters, a no-objection letter from the home regulator where applicable
Final licence
After the Approval-in-Principle, the promoters incorporate the bank, recruit management, establish systems and premises, and apply for the final licence. The CBN conducts a pre-licensing inspection before granting the licence. Further approvals are required before commencing operations, including deposit insurance arrangements.
Timeline
Licensing a new bank is a substantial project that usually takes many months, and often longer, given the capital, systems and governance requirements.
Alternatives to a new licence
Given the capital thresholds, some investors choose to acquire or invest in an existing bank, or to pursue a narrower licence such as a microfinance bank, payment service bank or finance company.
What makes a strong application
The CBN grants new commercial banking licences sparingly, and only to promoters who can show:
- Credible, well-capitalised promoters with a clear and verifiable source of funds
- A distinctive business case: the market the bank will serve and why it can compete
- Strong governance: an experienced board with independent directors, and a management team that meets the CBN's fit-and-proper standards
- Robust technology and security: core banking, digital channels, cybersecurity and business continuity
- Comprehensive risk and compliance frameworks, including AML/CFT, credit, liquidity and operational risk
Holding company structures
Under the CBN's regulations on the scope of banking activities, banks that want to own non-banking subsidiaries, such as insurance, asset management or other financial services businesses, generally do so through a CBN-approved financial holding company. Promoters planning a wider financial group should design the structure from the start; see our guide to corporate structuring.
Foreign promoters
Foreign banks and investors can establish Nigerian subsidiaries or invest in existing banks. They should plan for home regulator approvals, importation of capital through authorised dealer banks, and the CBN's review of the group's ownership and supervision. See our guide to registering a foreign-owned company.
Common reasons applications are delayed
- Unclear source of funds: the CBN scrutinises where the capital comes from and who ultimately owns the applicant
- Fit-and-proper gaps: shareholders, directors or senior managers who do not meet the CBN's requirements, or incomplete documentation for them
- Weak business plans: projections that are inconsistent with the proposed products, capital and market
- Generic policies: risk, compliance, AML/CFT and IT policies that are copied rather than tailored to the institution
- Missing the AIP deadline: failing to complete the set-up and apply for the final licence within the time allowed in the Approval-in-Principle
How we can help
We advise promoters, investors and existing banks on licensing, recapitalisation, acquisitions and regulatory approvals. Our banking and finance lawyers in Lagos and Abuja handle these applications from start to finish. See our banking licences service.
Frequently asked questions
What is the minimum capital for a commercial bank in Nigeria?
Under the CBN's 2024 recapitalisation programme, the thresholds are ₦500 billion for an international licence, ₦200 billion for national and ₦50 billion for regional.
Can a foreign bank operate in Nigeria?
Yes, typically through a Nigerian subsidiary licensed by the CBN, or by acquiring an interest in an existing bank with CBN approval.
Can a bank change its licence category?
Banks may apply to the CBN to upgrade or downgrade their licence category, subject to meeting the requirements of the new category.
How long does it take to get a commercial bank licence in Nigeria?
Licensing a new commercial bank usually takes a year or more, given the capital, governance, systems and inspection requirements. Acquiring an existing bank can be faster but requires CBN approval for the change of control.
Is it easier to buy an existing bank than to apply for a new licence?
It can be. Acquiring an existing bank avoids building systems, branches and a customer base from scratch, but it requires CBN approval for the change of control, careful due diligence and, often, additional capital. The right route depends on the investor's strategy and timetable.
What is the difference between a national and a regional banking licence?
A national licence allows a commercial bank to operate in every state of Nigeria, while a regional licence limits operations to a smaller number of states. The regional licence has a much lower capital requirement.
Does a new bank need deposit insurance?
Yes. Before it starts taking deposits, a new commercial bank must complete its arrangements with the Nigeria Deposit Insurance Corporation, as part of the CBN's pre-commencement requirements.
