to diversify funding sources away from banks. interest rates a major impediment to the realization of development through the intermediation role of the banking industry is the wide and persistent spread that exists between deposit and lending rates. the interest rate spread, which is the difference between the bank ’ s earnings from loaned funds and its cost of funds is influenced by non - interest expense, prudential and reserve requirements, market structure, inflation, credit risk and profit expectation of banks, among others. available studies on interest rate margins and profitability determinants show that high nonfinancial costs are largely responsible for the wide intermediation spread in nigeria. these costs often reflect inefficiencies in the operations of the banking system which very often are passed on to consumers. the data also show a positive relationship between net interest margin and overhead costs. the central bank will work with banks to improve efficiency in the banking system. we will encourage the banks to explore the idea of infrastructure sharing to improve efficiency and reduce cost of operations. other areas of cost cutting are through innovations that will reduce the cost of delivery of banks products. it is expected that gains from banking efficiency and other financial system reforms will reduce intermediation spreads. in addition to these measures, it is expected that banks will realize that excessive interest charges increase the risk of huge loan losses and financial instability in the medium term. it is, therefore, necessary for banks to moderate short - term profit expectations and curtail expenditure on compensation and bloated overheads. the cbn will work with the bankers ’ committee and, through moral suasion, encourage a consensus on what constitutes a reasonable margin. it is clear that in the present arrangement, all but the most powerful companies are at the mercy of banks as fund providers, and the regulator must play the role of consumer protection and ensure that banks charges are reasonable and consistent with both the profit motive of the individual banks and in the interest of the system. real interest rates in double digits are much higher than the growth potential of gdp given structural constraints. reform of the payments system the payments system plays a crucial role in any economy as a channel of inter - sector, interindustry and inter - company financial resource flows, thus, promoting economic growth. understandably, the central bank of nigeria ( cbn ) accorded the payments system due priority in its reform agenda of the financial system. thus, the cbn in partnership with other stakeholders embarked on extensive reforms of the payments system

##demic. our economic growth has been forthcoming. fundamentally, growth is being supported by the diversified economic structure, including in exports markets and products, and favourable labour market conditions that continue to drive consumption as the key engine of growth for malaysia. while this being the case, the impact of the economic rebound from the pandemic remained uneven, with vulnerable groups experiencing slower recovery. the world 1 / 6 bis - central bankers'speeches bank recently highlighted that nearly 70 % of malaysian lower - income households assessed themselves as having inadequate financial resources to meet their monthly basic needs4. it is clear that there are still more that we can and must do to tackle these challenges. this entails prioritising policies to rebuild retirement savings, improve targeting and effectiveness of social programmes, enhance social safety nets, encourage active labour participation and facilitate orderly transition to a greener ecosystem. with the integration of sdgs in malaysia's national development plans and monitoring of its implementation, this brings together our efforts to elevate quality of life, reduce inequalities, promote more inclusive growth and improve the country's global competitiveness. the recently announced'ekonomi madani : memperkasa rakyat'framework crystalises our aspiration and commitment in this endeavour to balance economic growth with sustainable considerations. on the part of the financial sector, new initiatives are also underway to accelerate progress towards sustainable development through the introduction of tools for investors to find sdg - aligned investment opportunities in malaysia and new sustainable finance instruments to raise capital. undoubtedly, the financial sector plays an important role in supporting sustainable economic transformation. delivering change at the speed and scale needed to achieve the sdgs by 2030 demands a reorientation of investment priorities to align with more sustainable and value - based principles. the un conference on trade and development and the imf estimate that a significant funding gap of approximately usd4. 3 trillion in global annual investments are needed to make strides in the sdgs. while this may appear as a staggering figure, this is equivalent to only around 1 % of the usd379 trillion of the total financial assets held by banks, institutional investors and asset managers. the call for islamic finance to shift from'halal'to'tayyib'as one of the key drivers of the economic framework, which aligns closely with the fundamental values of shariah that underpins islamic finance, is thus very timely. shariah values ultimately strive towards ihsan, or'attainment