In Nigeria, the financial sector is regulated by the Central Bank of Nigeria (CBN) to ensure stability, transparency, and integrity. Various types of financial institutions, including commercial banks, merchant banks, specialized banks, microfinance banks, and fintech services, must meet specific licensing requirements to operate legally. The CBN issues three primary banking licenses: Commercial Banking, Merchant Banking, and Specialized Banking. Each license has distinct activities it authorizes and requires different levels of capital investment, business plans, and operational documentation. For example, commercial banks need a minimum capital of ₦200 billion for national operators, while merchant banks must have ₦50 billion in capital. Specialized banks have varied capital requirements depending on their focus, ranging from ₦5 billion for mortgage institutions to ₦20 billion for non-interest banks.

In addition to traditional banks, other financial institutions like microfinance banks, finance houses, and payment service providers (PSPs) also require licenses. Microfinance banks must meet capital requirements that range from ₦200 million for Unit MFBs to ₦5 billion for National MFBs. Finance houses have a ₦100 million capital requirement and a licensing fee of ₦250,000. PSPs, including mobile money operators and payment gateways, must adhere to stringent technical and regulatory requirements, with licensing fees starting at ₦1 million and escrow amounts of up to ₦2 billion. The regulatory environment ensures that only well-prepared institutions are granted licenses, fostering growth in Nigeria’s digital financial services while maintaining sector integrity. Click on this link to download full article: https://vestigesolicitors.com/wp-content/uploads/2025/02/Understanding-the-Licensing-Requirements-for-Banks-in-Nigeria-for-publication-8.pdf