MEKDES MENA TEKA2026-02-052024-11https://etd.hu.edu.et/handle/123456789/668The banking sector plays a vital role in the development of the country, serving as the conduit for financial intermediation. Minimum capital requirements are essential for ensuring banks maintain a buffer against potential losses, thereby safeguarding depositors’ funds and promoting overall financial stability. These requirements are designed to enhance the resilience of banks and prevent systemic risks that could arise from inadequate capitalization. NBE sets capital requirements for banks from time to time by updating the pre-existing capital requirements to respond to both domestic needs and international regulatory standards. The study aimed to evaluate the minimum capital requirement laws and its challenges for small banks to meet the required capital in Ethiopia. In relation to the methodology, the study used a blend of both doctrinal and non-doctrinal legal research, and in addition, the purposive sampling technique was used. The study has been conducted on the basis of qualitative research techniques to analyze minimum capital requirement laws and its challenges for small banks to meet the required capital in Ethiopia. Data were collected from different sources like laws, proclamations, and directives by NBE, books, journals, and articles related with minimum capital requirements for banks. Moreover, semi-structured interviews have also been conducted with private banks managers at the Hawassa branch and NBE policy supervision department. Finally, the data collected were analyzed through the content analysis method. Based on the findings of the thesis, it is concluded that small banks, especially those started their operations recently, faced challenges to meet the required amount of capital because of the inadequate capital held by them. Based on the findings, recommendations were forwarded. So, it is highly recommended that the NBE should regularly review and adjust the laws and policies to keep pace with the changing economic conditions and launch campaigns aimed at educating the public to join the bank industry. Lastly, the NBE must instruct small banks to have continuous training programs for their staff and to use new technology to minimize costsen-USCapitalMinimum Capital RequirementNational Bank of EthiopiaSmall BanksThesis