The Banking Ordinance of 1952 is the founding statute of Nigerian banking regulation. Drafted by the colonial Financial Secretary on the recommendations of the Paton Report, it required every bank operating in Nigeria to hold a licence, to maintain a minimum paid-up capital (£12,500 for indigenous banks, £200,000 for expatriate banks), to keep a cash reserve against deposits, and to submit to inspection. The Ordinance did not create a central bank — that came seven years later — but for the first time it made banking in Nigeria a regulated profession, not a piece of street commerce.
The Central Bank of Nigeria Act, No. 24 of 1958 — passed by the Federal House of Representatives on 17 March 1958, given Royal Assent on 17 May 1958, operations commenced 1 July 1959 under Governor Roy Pentelow Fenton — gave the country its first lender of last resort. The CBN issued the Nigerian Pound at par with the West African Pound on the day it opened, took over the bank-licensing function from the Financial Secretary in 1962, and over the next decade built the inspectorate, the clearing house and the bank-examination department that the 1952 Ordinance had assumed but never staffed.
The Banking Decree of 1969 — Decree No. 1 of 1969, signed by Gowon at the height of the civil war — was the second milestone. It raised the minimum paid-up capital sharply (₦600,000 for indigenous banks, ₦1.5m for expatriate), required at least three-quarters of directors to be Nigerian citizens, made the CBN's prior approval mandatory for any new branch, and gave the CBN power to revoke licences without recourse to the courts. It is the legal genome of every banking regulation that followed — the BOFIA 1991, BOFIA 1999, BOFIA 2020 are all amendments of the 1969 architecture.
Three consequences, by 1970. First, the surviving indigenous banks (National, Wema, ACB) had to recapitalise or close — most did. Second, every expatriate bank had to begin appointing Nigerian directors, which is how the boards of First, Union and UBA Nigerianised in the early 1970s ahead of the formal indigenisation decrees. Third, the CBN, which in 1960 had been a small currency-issue department on Tinubu Square, became by 1970 a genuine bank regulator with thirty examiners, a clearing house in Lagos, and statutory authority over every deposit-taking institution in the country.
Figure 1
Licensed Nigerian banks, 1894–2024
Every regulatory cycle since 1952 has compressed the field. The 2005 Soludo consolidation cut ninety banks to twenty-five in eighteen months.
Figure 2
Minimum paid-up capital required to operate a bank, 1952–2024 (₦ million, log scale)
The regulatory bar has risen by seven orders of magnitude. Each step up has reset who is allowed to call themselves a Nigerian bank.