requirement of N25bn as the minimum capital base for all banks in Nigeria. The banking sector reform was part of the overall economic reform agenda of the Obasanjo administration. The reform agenda are encapsulated in the National Economic Empowerment and Development Strategy(NEEDS). The need for reform was based on what was considered by the Central Bank as the problems of the banking industry. Six major problems were identified by the erstwhile CBN Governor at a Special meeting of the Bankers' Committee on 6 July, 2004. These are: i) Weak corporate governance, evidenced by high turnover in the Board and management staff, inaccurate reporting and non-compliance with regulatory requirements, falling ethics and de-marketing of other banks in the industry; ii) Late or non-publication of annual accounts that obviates the impact of market discipline in ensuring banking soundness; iii) Gross insider abuses, resulting in huge non-performing insider-related credits; iv) Insolvency, as evidenced by negative capital adequacy ratios and shareholders' funds that had been completely eroded by operating losses; v) Weak capital base, even for those banks that have met the minimum capital requirement, which currently stands at N1bn. or US$7.53m for existing banks and N2.0bn. or US$15.06m for new banks, and compared with the RM2.0bn or US$526.4m. in Malaysia; vi) Overdependence on public sector deposits, and neglect of small and medium class savers(Soludo, 2004:6). Based on the problem analysis of the banking sector, the major elements of reforms as spelt out by the Central Bank include; i) Requirement that the minimum capitalization for banks should be N25billion with full compliance before end-December 2005(that is 18months notice) ii) Phased withdrawal of public sector funds from banks, starting in July 2004 iii) Consolidation of banking institutions through mergers and acquisitions iv) Adoption of a risk-focused and rule-based regulatory framework. v) Adoption of zero tolerance in the regulatory framework; especially in the area of data/information rendition/reporting. All returns by banks must be signed by the MDs of the banks. The so-called're-engineering' or manipulation of accounts especially in hiding information under'other assets/liabilities and off balance sheets will henceforth attract serious sanctions vi) The automation process for rendition of returns by banks and other financial 20