LAGOS – Mr Adedapo Adeleke, the Director, Bank Examination Department, Nigeria Deposit Insurance Corporation (NDIC) says weak corporate governance still persists among commercial banks.
Adeleke said that in spite of the adoption of International Finance Reporting Standards (IFRS) most banks still had not imbibed corporate governance as a policy.
He made the assertion while delivering a paper on: “Overview of challenges faced by examiners on on-site examination process” at the ongoing 2014 Bank Examiners’ Conference on Friday in Lagos.
He said that the adoption of IFRS in financial books, which de-emphasised weak corporate governance, only resulted into huge profits by banks.
The director said that banks’ declaration of huge profits had not resulted into lending to the real sector regarded as the engine of growth for national development.
Adeleke, however, said that there was a significant improvement in risk management practices by banks.
He said that NDIC had introduced supervisory and financial approaches such as macro prudential supervision, sustainable banking, IFRS and Basel II and III, as part of measures for risk management.
Adeleke said that consolidated supervision had also been substantially implemented to strengthen the system, in spite of the challenges of lending in the Nigerian environment.
He added that other challenges were the impact of fixed income securities on the financial position of banks and technological innovations, including mobile money banking.
He said that the implication for sustainable banking remained topical, stressing the need to focus on the challenges facing the bank examiners in appraising the affairs of the banks.
Adeleke said that equipping examiners was necessary because the future of banking would be more complex in terms of product offerings through the Information Communication Technology (ICT) arsenals.
He said that the development could provide a compelling reason for examiners to be proactive as future banking “poses big challenge’’.
On the consumer side, Adeleke said that NDIC would increasingly demand value from regulators and supervision.
He warned that NDIC would soon embark on zero tolerance from wrong reporting or non-provision of required information. (NAN)