The acting Governor, Central Bank of Nigeria, Dr. Sarah Alade, on Monday said that non-compliance with the nine sustainable banking principles by banks in the country could lead to sanctions.

She, however, said the central bank had yet to set any specific deadline for compliance because the concept was still relatively new.

Alade, who spoke at the International Sustainable Banking Forum, hosted by the CBN and the International Finance Corporation in Lagos, said the central bank would continue to monitor the banks to ensure compliance.

The acting CBN governor, who was represented by the Deputy Governor, Operations, Mr. Kingsley Moghalu, said, “Banks and other financial institutions under our supervision will have to comply and we had issued circular to that effect. Any bank or financial institution that fails to comply will face sanction. There will be consequences for that.

“But we want to, first for all, begin by making a case to the banks on why they need to follow the nine sustainability principles. They could actually be profitable while maintaining the three Ps of profit, planet and people. We want to move from banking to sustainable banking. In this country, we have seen environmental degradation. So, it is in our interest to comply.”

According to Alade, the global financial crisis of 2008 and 2009 has made the question of sustainability crucial because the global financial industry saw the futility and short-sightedness of just focusing on profits as the whole financial system actually failed.

As part of the efforts aimed at ensuring compliance, Alade said the CBN had asked banks to ensure that women occupy 40 per cent of the leadership position in the banks, and 30 per cent of board positions.

“It is a string regulatory requirement in which a circular was issued. We discussed it at the Bankers Committee. It is not a one way thing; I think that there is an agreement. Studies have shown that when women participate actively in economic activities, more economic growths are sustained.

“I want to let you know that in many countries of the world, this is not easy to achieve. Even in Europe and the US, there are problems in making women occupy certain positions. The EU has made rules on that to make it mandatory.”

The Country Manager of the IFC, Mr. Solomon Adegbie-Quaynor, said the corporation was working with Nigerian banks by assisting them with capacity-building programmes that would help them to comply with directives.

He also commented on the IFC’s plans to invest in various sectors of the economy to enhance economic growth and development.

He said, “We are funding investments that will help bring 5,000MW of electricity to the power sector. We are also looking at a number of other investments in the distribution companies.

However, he said the two-day conference would help examine how to boost sustainable banking.

He added, “Sustainability is central to inclusive economic growth and aligns with IFC’s strategy for long-term economic development.”

Source: Punch (by Oyetunji Abioye)