The Corporate Affairs Commission (CAC) has released new guidelines to support Deposit Money Banks in their ongoing recapitalization efforts.

In March 2024, the Central Bank of Nigeria (CBN) directed all banks to increase their capital base to enhance productivity. The CBN mandated that commercial banks with international authorization must raise their capital base to ₦500 billion, while national banks must reach ₦200 billion threshold, and those with regional authorization are expected to achieve a ₦50 billion capital floor. Banks have started issuing public offers and rights issues to raise the money and meet the two-year target.

According to a statement from the CAC, posted on its website, the guidelines are in line with the Commission’s powers under Section 8 (1) (e) of the Companies and Allied Matters Act 2020.

The guidelines are intended to streamline the filing process for new incorporations, increases in share capital, mergers, and changes in license authorization.

1. New Incorporation

For new incorporations, applicants must provide:

• An approved name reservation or availability.
• Approval-in-principle from the sector regulator (CBN).
• A duly completed online incorporation form.
• Payment of stamp duty and filing fees based on the license category.

If all requirements are met, a certificate of incorporation will be issued within 24 hours. Detailed checklists for these processes are available at www.cac.gov.ng/resources.

2. Increase in Share Capital

Banks looking to increase their share capital via private placements, rights issues, or offers for subscription need to submit:

• Duly signed company resolution

• Return of allotment
• Statutory declaration by directors verifying that the issued share capital is fully paid-up
• Notice of the fact that regulatory approval is required
• Affidavit deposed to by a director of the company to the effect that regulatory approval is required for the increase
• Amended memorandum of association reflecting the new share capital
• Payment of stamp duties and filing fees
• Issuance of letter acknowledging notice of increase and requirement of regulatory approval
• Filing of regulatory approval
• Issuance of certificate of increase

A letter acknowledging the notice of the required regulatory approval, the filed regulatory approval, and the issuance of a certificate of increase must also be provided. These steps must comply with Section 127 (3), (4), and (5) of CAMA. The certificate of increase will be issued within 24 hours of filing the regulatory approval. Annual returns and information on persons with significant control must be up-to-date.

3. Merger

For small and medium banking institutions planning to merge, the following are required:

• A duly signed special resolution for merger by each merging company.
• A merger scheme approved by the Securities and Exchange Commission.
• A certified true copy of the court order authorizing the Extraordinary General Meeting of each merging company.
• Evidence of the court-ordered meeting published in two newspapers and the Federal Gazette.
• A certified true copy of the court order sanctioning the merger scheme.