Step by Step on how to start your own bank

Step by Step on how to start your own bank

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Banking industry in any Nation of the world is one of the industry that dictates the economy. That is why it is seen of those banking investors as big men and women. Of course as entrepreneurs, solving a problem requires that you are felt up with the existing solutions. Are you fed up with the already existing banking system and you want to solve the problems? Then follow this step by step on how to start your own bank.

These quotes will motive you more to start your own bank now

Years ago, Mayer Amschel Rothschild said “Give me control of a nation’s finance and I don’t care who make the rules.” Another famous entrepreneur said “If you want to be rich and powerful, own a bank.

So, those are two of many reasons you need to start your own bank. Now follow the following step by step to starting your own bank. Though these steps focus on starting a bank in Nigeria which can also be replicated any where in the world.

FIRST THING FIRST: Understand the financial sector and know how money works.

When talking about the financial institutions or system which banking industry belong to, it is a very complicated system that requires higher expertise, intelligence, critical thinking, integrity all because individuals cash are entrusted in your hands. So, if you are starting a bank, the first thing is to understand the financial system and how money works, moves and talks. You must understand indexes, policies, terminologies, the cracks and the straights, you must understand the nitty gritty just because of your customers.


As I said, banking industry is sensitive. It requires lot of experience which cannot only be got reading books or browsing the internet. You need to be practically involved. Bank founders like Fola Adeola of GTB, Jim Ovia of Zenith Bank, Tony Elumelu of UBA were once employees of some other banks before they resigned to start their own banks. And most importantly they are members of recognized financial institutions like Chartered Institute of Bankers and they were well schooled.

But the point here is that as an entrepreneur, you don’t need to be a banker or chartered before you start your own bank. Since you can understand the financial sector, you can always employ or partner with best brains to be at the fore front while you work behind the scene.


There different categories of banks you can start from such as commercial banks, micro-finance banks and community banks. But here, new generational banks are the face of the day because of their innovative and scaling ability. Banks like GTB, First Bank, FCMB etc are all in the category commercial banks.

Before you make up your mind, you need to know the problems you are solving and decide on your area of niche either investment banking, business banking, corporate or private banking, retail banking.


This is a very important step you need to take in order to avoid disaster when you commence operation. Due to the huge capital required to set up a bank, mistakes must be reduced to the barest minimum. A feasibility study will help you determine the flaws in the banking sector and how you can leverage such flaws to create a competitive advantage. Most importantly, your feasibility research must be customer-oriented or market focused; as you will be fighting to grab some market share from the existing banks. One of the key thing here is a good bankable name. Have you thought of First Bank, Guarantee Trust Bank etc, those are good bankable names. Get a name for your bank too that will ring a bell.


No doubt about it, starting a bank requires lot of screening, application, instructions and procedures to follow. You will need to approach Central Bank of Nigeria. Get the necessary information and forms and wait for you to be approved. The idea behind these tight screening and investigation about you and your banking idea is to tackle any fraudulent acts that may occur in your operations.


Well, starting a bank is not a small money you will be needing and most importantly, your own money cannot start a bank. So, you need to raise capital through investors and partnership. And when considering who to approach with your idea for capital or partnership, their integrity is a must to take note. Who are they? What is the source of their wealth? Do they have questionable characters? Those are the questions you have to answer by making research about the individual because before your bank can thrive, it must be purely run by people of good character in the society.


Now it is time to get your licence since you have done everything necessary and the management are now known that is your investors. Central Bank is the place to get licensed. The procedures use to take some time because it will be their point of duty to do proper investigation before they give you license to operate banking institution.


Corporate Affairs Commission is the body responsible for registration of businesses. You will need to approach them and register your bank and of course your license and other documents from CBN will be needed in the process of registration.


Strategic locations are very key in setting up a bank. Your facilities much be setup in a public area like market, busy environment and be ready to engage in competition with existing banking areas. And you can also look at none banking areas if you can play around problems associated with those areas. After getting your location and facility ready, employ the pioneer team to kick start operation immediately.


The banking industry is highly competitive and innovation is the major driver. Customers seem to patronize popular and innovative banks. Technology is the major force acquired by new generational banks to make banking easy for their customers. Easy of use, customer experience, creativity are the selling point of any bank. Not only that, market and advertising to reach customers and to take your own share of the existing market. Growth is inevitable for succeeding business, so you need to grow to other areas and scale internationally. Make your name and let it ring a bell throughout.

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