Experts decry policy gaps, inconsistency in sector
She said the problem has caused instability and associated collapse of banks, noting that laws and regulations should be applied to all institutions without exemption and devoid of gaps.
Speaking at the FITC Thought Leadership Discussion Series in Lagos last weekend, Ambah affirmed that time has come for banking regulators to come together and agree on similar policies to avoid conflicting regulations.
She maintained that the fears of probable bank failure could be averted if all stakeholders in the industry could play their roles effectively in synergy.
“The greatest problem banks and banking institutions have is corporate governance, and lack of good corporate governance always leads to bank failure.
“The issues associated with corporate governance were issuing credit without following appropriate process and the upturning of entrenched processes by managing directors, among others,” she said.
Earlier the Managing Director, Nigeria Deposit Insurance Corporation (NDIC), Umaru Ibrahim, stressed the possibility of another bank failure in the country if the prevailing weak corporate governance culture and weak internal control are allowed to continue.
Represented by the Executive Director, Operations, NDIC, Aghatise Erediauwa, he said: “Banks usually have a cycle of between seven to 10 years. If we have not had bank failure in 15 years, then they are bound to happen soon. Presently, we are worried that the cycle is almost complete.
“This is all due to the issue of weak corporate governance culture in the banking system and weak internal control. If this is the situation, how would this drive financial system to achieve economic growth? This is our fear as regulators and there is a lot to be done to avoid future occurrences.”
To the Chief Executive Officer, Sterling Bank Plc, Abubakar Suleiman, other than corporate governance, issues concerning lack of sovereign governance and transparency in regulations need to be taken seriously by relevant regulatory agencies.
This, he said, has become challenging to the banking industry, even though corporate governance in banks had become better now.
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