Don urges CBN to review banks’ capital base

A don, Prof. Ailemen Ikpefan, has advised the Central Bank of Nigeria (CBN) to review the current N25 billion capital base of Nigerian banks to enable them compete favourable with their international counterparts.

Ikpefan, from the Department of Banking and Finance, College of Management and Social Sciences, Covenant University, gave the advice during the 29th Inaugural Lecture of the institution on Monday in Ota, Ogun.

According to him, reforming the financial sector remains a major tool for banking soundness.

Our correspondent reports that the lecture was entitled: “Securing the Financial Health of Nigerian Banks Today for the Future.”

He noted that a further review of the minimum paid up capital from the present N25 billion for Deposit Money Banks would significantly enhance their performance and improve their capacity for cross border businesses.

“Nigerian banks need to be proactive and strategically positioned to be active and not spectators in the emerging world so as to meet international standards and transform the economy.

“In addition, for Nigerian banks to play their proper role in financial services delivery, locally and internationally, the apex bank needs to improve on the framework for operations of banks and non-bank financial intermediaries,” he said.

Ikepefan said there was need for CBN to put more emphasis on good cooperate governance in order to significantly improve the performance of the Nigerian banking sector.

He urged the regulatory authorities to embrace policies aimed at controlling inflation and prioritise fostering financial intermediation, adding that fiscal and monetary policies designed to promote output stability and sustainable growth were good for financial intermediation.

He stressed the need for banks’ managements in conjunction with the regulatory authories to create awareness on digital banking to promote financial inclusion.

Ikpefan called on the leadership of banks to address mismanagement and fraud, which posed a great threat to the financial health of banks.

In his welcome address, Prof. Abiodun adebayo, the Vice-Chancellor of Covenant University, said the institution was delighted to present another topical lecture that addressed a fundamental aspect of national and economic development.

Adebayo said the inaugural lecture series was germane and timely in view of the national cash crisis experienced from the execution of cashless policy of the CBN and Naira redesign.

“The crisis is still unabated as the country and citizens continue to count their socio-economics losses,” he said.

Adebayo said some challenges such as poor cooperate governance, higher level of non-performing loans, inadequate and ineffective online banking facilities, among others, had negatively impacted banks and customers’ trust.