. ii. a number of banks have returned to the profit - making path and improved their balance sheets, as the recent results of their financial statements have shown. iii. banks are gradually resuming lending to the private sector with the additional liquidity of more than n1. 7 trillion injected into the banking system through the issuance of amcon bonds, and significant progress in re - directing credit to the power sector and smes at single digit interest rates. these initiatives have saved and helped create thousands of jobs in the economy. iv. a new code of corporate governance has been issued by the bank. the ceo of banks shall serve a maximum tenure of 10 years. furthermore, all ceos who would have served for 10 years by july 31, 2010 ceased to function in that capacity and have handed over to their successors. v. nigerian banks are now key players in the global financial market with many of them falling within the top 20 banks in africa and among top 1000 banks in the world. vi. the reform has culminated in moderating the spread between the lending and deposit rates to 9. 7 per cent as at end - december 2011, from 12. 2 per cent in 2010. this has contributed to the existing macroeconomic stability in the economy with inflation moderating to 10. 3 per cent as at end - december 2011. vii. the hitherto volatility in the exchange rate witnessed in the foreign exchange market has been brought under control. the premium is within the international standard of 5. 0 per cent. viii. there is greater cooperation between the monetary authority and the banks through regular meetings and collaboration on policy issues. ix. the reforms have brought about greater confidence in the banking system with the removal of distress banks and the adoption of a strict code of corporate governance. x. increased widespread use of e - payment services among nigerians. bis central bankers ’ speeches challenges to the banking reforms the nigerian banking reform, despite its laudable achievements is confronted with certain challenges. first and foremost is the wrong perception of the intent of the reform. the introduction of the new banking model, especially specialized banking ( non - interest banking ), is intended to broaden the scope of financial services offered by banks in nigeria. however, this has been given a religious connotation. the wrong perception and stiff resistance to the policy could potentially deter prospective investors in the banking industry. second, the reluctance of nigerians to accept positive changes in global dynamics is another challenge. there is incontrove

banking crisis in 2008 found eight interrelated factors responsible. these were macroeconomic instability caused by large and sudden capital inflows, major failures in corporate governance at banks, lack of investor and consumer sophistication, inadequate disclosure and transparency about the financial position of banks, critical gaps in the regulatory framework and regulations, uneven supervision and enforcement, unstructured governance & management processes at the cbn / and weaknesses in the business environment. each of these factors is serious in its own right. acted together they brought the entire nigerian financial system to the brink of collapse. we all know that a well - functioning financial system matters to everyone and to the economy at large. the nigerian economy has huge potential for growth. to realize this potential, it is imperative that we learn lessons from the crisis and take steps to not only fix the problems, but to also introduce measures to establish financial stability, a healthy evolution of the financial sector and ensure the banking sector contributes to the development of the real economy. as a result, the nigerian banking system has steadily evolved, following wide and farreaching reforms embarked upon by the regulatory authorities. following the banking crisis of 2008, the central bank of nigeria articulated a blue print known as “ the project alpha initiative ” for reforming the nigerian financial system in general and the banking sector in particular. the reforms aimed at removing the inherent weaknesses and fragmentation of the financial system, integrating the various ad - hoc and piecemeal reforms and unleashing of the huge potential of the economy. bis central bankers ’ speeches critical elements of banking reform in nigeria the current reforms which began in 2004 with the consolidation programme were necessitated by the need to strengthen the banks. the policy thrust at inception, was to grow the banks and position them to play pivotal roles in driving development across the sectors of the economy. as a result, banks were consolidated through mergers and acquisitions, raising the capital base from n2 billion to a minimum of n25 billion, which reduced the number of banks from 89 to 25 in 2005, and later to 24. beyond the need to recapitalize the banks, the regulatory reforms also focused on the following : risk - focused and rule - based regulatory framework ; zero tolerance in regulatory framework in data / information rendition / reporting and infractions ; strict enforcement of corporate governance principles in banking ; expeditious process for rendition of returns by banks and other financial institutions through e - fass ; revision and updating of relevant laws for effective corporate governance and ensuring greater