The ongoing reforms in the Nigerian banking system have resulted to mega banks, driven by advanced competition. This has raised concerns about their social and environmental performance. The purpose of this paper is to agitate for the prioritization of corporate social responsibility (CSR) as the foremost condition for banking stability in the reforms.
This paper draws largely from the theory of CSR, and reviews pertinent policies and practices in the Nigerian banking system.
The paper identifies self‐induced vices, regulatory laxity, inauspicious macro‐economic environment, and endemic corruption in the economy as the major constraints to the discharge of CSR in the Nigerian banking system.
It may be necessary to restructure the Central Bank of Nigeria to clearly separate the roles of banks' supervision from fiscal policy management for a more effective economic, social and environmental viability of the banking system. Furthermore, the banking system should focus less exclusively on shareholders and financial measures of success to include all stakeholders' relationships in their mission to sustain competitive success in the future.
It is imperative that external regulation should be blended with conscious self‐regulations by the banking institutions for the reforms to effectively include the delivery of CSR. This should be anchored on effective corporate governance in the banking institutions in the system.
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