September 25, 2009

The Nigerian banking industry is obviously evolving at a pretty fast pace. Only a few years ago, the industry's statutory capitalisation-minimum shot up from a 'mere' N2billion to about N25 billion. There were attendant developments to this rapid growth - namely, the multi-country branch growth, rapid expansions in domestic branch network, the number of "generic" products offered by various banks and so on. Some levels of acceptance were equally accorded the nation's banks within the international banking space.

In addition to these and aside the adverts which these banks sponsored in international media, many international rating agencies assigned very fantastic albeit controversial grades to them. But these are largely on the positive side. The negative side of this evolution is that the industry smelt the supposed moral steel of the regulators necessary for its effective supervision. In turn, the fruits of gross abuse of corporate governance standards ripened and threatened the survival of the banks and safety of deposits.