LASU don calls for stronger banking reforms, stability

Ashamu ​‌‌‍​‍⁠⁠‌⁠‌‌⁠⁠‍⁠‌‌​made the call in his 129th inaugural lecture titled, “From Reform to Resilience: Banking Sector Transformation, Financial Stability, and Economic Growth in Nigeria.”

He said the lecture was the first inaugural lecture delivered by the Department of Finance, Faculty of Management Sciences, LASU.

Ashamu said Nigeria’s banking sector had undergone reforms, crises, recoveries, innovations and regulatory interventions that shaped its current structure.

He said banking reforms should go beyond recapitalisation to strengthen governance, regulatory institutions, technological capacity and financial resilience.

According to him, effective reforms require policy consistency, transparency, strong corporate governance and regulatory frameworks capable of addressing emerging risks.

He said financial stability required institutions capable of withstanding shocks without disrupting economic activities, while maintaining public confidence and efficient credit allocation.

Ashamu identified high non-performing loans, exchange rate volatility, inflation, insider abuses and weak risk management as challenges threatening banking stability.

He said digital transformation had improved financial accessibility and operational efficiency, but also created cybersecurity, digital fraud and data protection risks.

The professor urged Nigerian banks to strengthen cybersecurity infrastructure, digital surveillance systems, fraud detection mechanisms and customer education on digital safety.

Ashamu said banking sector transformation should translate into productive investments, employment generation, financial inclusion and greater support for small and medium enterprises.

He noted that in spite of increased banking assets and lending capacity, SMEs continued to face high lending rates, collateral constraints and limited access to formal credit.

The don urged authorities to strengthen developmental financing policies and credit guarantee systems to encourage lending to agriculture, manufacturing, infrastructure and SMEs.

He also called for stronger regulatory and supervisory frameworks, including technology-driven monitoring systems to identify systemic vulnerabilities before they escalate.

Ashamu said financial regulators should deepen collaboration while preserving professional standards, policy consistency and operational autonomy.

He urged banks to strengthen corporate governance, internal controls, risk management, board independence and transparency to discourage insider abuses and excessive risk-taking.

The professor advocated deeper financial inclusion through investments in digital infrastructure, financial literacy, rural connectivity and technologies targeting underserved populations.

He said financial institutions should integrate environmental, social and governance principles into lending and investment decisions to promote sustainable development.

Ashamu said future banking resilience would depend on technological adaptability, institutional discipline, regulatory responsiveness and the ability to withstand emerging economic and digital risks.

He said his academic contributions had consistently examined the relationship between banking reforms, institutional quality, financial stability and economic development in Nigeria.