With a large deployment of power electronic converters in various critical applications, condition health monitoring is increasingly becoming important. In modular multilevel converter, submodule capacitance represents one of the critical components, having a strong impact on the overall converter cost and performance. This paper proposes a simple method for the submodule capacitance monitoring, deployed directly on the low-cost submodule controller and operating without disturbing or impacting the normal converter operation. Offline and realtime simulations, as well as experimental results, demonstrate the effectiveness of the proposed method in identifying changes in the submodule capacitance, which is of high importance for reliable converter operation.