CBN to Banks: Days of armchair banking are over

Godwin Emefiele, the governor of the Central Bank of Nigeria, Tuesday called on banks to wake up to their responsibility of contributing to economic growth adding that the times of armchair banking through investment in treasury bills are now over.

Represented by Joseph Nnanna, the CBN deputy governor, economic policy, the governor said unemployment remained the biggest challenge in the country and appealed to the industry to assist government in addressing the challenge.

He said, “We cannot conceive an economy without banks and neither can we conceive banks without an economy.

The days of armchair banking, playing in the treasury bill space are right behind us. The Central Bank of Nigeria is bullish and we have in fact taken our responsibility very seriously.”

He further explained that the era of huge non-performing loans which had become a source of worry to the banking industry was now a thing of the past.

Having warned deposit money banks against excessive investment in fixed securities to the detriment of real sector financing, Emefiele charged the banking sector to live up to its core responsibility of stimulating the economy by advancing credit to employment generation sectors of the economy.

Emefiele said these at the opening of the 12th annual Banking and Finance Conference with the theme, “The future of Nigerian banking industry-360 degrees.”

The apex bank boss also urged the banking industry to embrace the 21st century banking by redirecting surplus resources to critical sectors of the economy.

He said that anyone benefiting from any loan facility must pay back, adding that the support of the judiciary was needed in this direction.

“In the past months, we have come up with new initiatives – the loans to deposit ratio is aimed at transforming liquidity management into risk asset management and asset transformation.

We do not want the banks to be money changers. Banking is not banking if you only play in the government-fixed income space.

Banking becomes meaningful when you take liquidity excesses from your surplus centres and channel them into scarce areas; that way, you are transforming liquidity into assets and you are growing the economy and creating employment,” he said.

In the area of unemployment, he said banks had a lot or role to play to create jobs, adding that the apex bank would continue to come up with initiatives to make lending less risky.