BANKING DISTRESS: Is a condition when the Banking system as a whole has negative capital and current profit are insufficient to cover losses to such an extent, that the banking system is unable to generate internally positive capital.

However, Banking distress has been a talk of the town, and it has became so rampant that even the customers to banks are after and so conscious of bank distress, which may or may not occur. Bank distress has been a cankerworm which has eaten deep to the banking stem, which leads people to death, frustration, sickness, denotion, poverty even madness over night. Let take the case study of the former (ACB and Savanah Bank) these two has led some people to poverty and some to untimely death, some ran madness over night, some children dropped out of school some family can’t find food to eat, even some business closed down/folded up.

Moreover, every problem has a solution, there are some measure that could be taken to eradicate this cankerworm that has eaten deep to banking system, one of the measure and the most important is from the foundation before any bank should start in existence, they should make sure that it is a registered bank with every statistic ready for the operation another important one is capable management have to be very strong enough. Technological know how, trained expert, another important point is SITING i.e where the bank will be built, weather insane opposite or a place that is at the SITE. You consider also the target, and the kind of business that people around engaged on.

Apparently, there should be won for further training of the staffs, and a good conducts especially from the staffs has to the exhibited on how to welcome and handle customer because there is an idiage which says “one good turn deserves another”. If all these things are put in place, bank distress must be eradicately.

Finally, recommendation for the staffs to be travelly outside the country for a course has to be in place, in order for them to get a new ideas and innovation that can help in development of the banks, which leads to civilization. Embezzlement of bank money has to disappear and fraud of any kind has also to be disappeared completely.

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The issue of bank distress has been a problem which financial institutions suffer must. The era of all for free banking in Nigeria brought which can be traced as of (1892) when banking started in Nigeria gave room for the establishment of many banks because there was little or no laws guiding banking business. Because the was no law or supervisions on establishment of banks, many banks were established without adequate capital requirement.

Morestill, the era of Structural Adjustment Programme (SAP) and deregulation brought another face in the banking industry which made many banks to sprang up in Nigeria. This made many more banks to be established in our country. But, as more laws guiding banking industries were established some of these mushroom banks were affected. Such laws were regulated by some bodies and each bodies include, BOFIA, CAMA 1990, NDIC etc. banking and other financial institution Act, Company and Allied matter Act, Nigerian Deposit Insurance Corporation and all these bodies regulating the activity of banking in Nigeria.

However, bank distress became a problem in the country when these regulating bodies started monitoring the activities of these banks. Infact, so many of them as a result of not meeting the banking CAMEL, they became distress. CAMEL here refers to, capital Adequacy, Assets Quality management competency, Earning Strength and Liquidity sufficiency.

Infact, by 1954, vitually all the indigenous banks that sprary up during the free-for-all banking period got distressed and finally failed. In this period only three of them, the National Bank of Nigeria, the Agbonmagbe bank (Presently WEMA Bank) and the African continental Bank survived. Infact they were able to survive because they got assistance from state government.

1.2 STATEMENT OF PROBLEM

Having seen all the measures adopted by the government to avoid bank distress by establishing regulating bodies and laws to avoid distress. Many banks still get distress. The question now is, why do banks still get distress after all these guideline established by these regulatory bodies.

TOPIC: Hence, it is hoped that it will serve as a basis for further academic adventures. The research work is expected to be of immense help to foreign investors in the country. The relief should be stricked to manufacturing companies like those in the pharmacetical food, processing, building materials, banks etc. the banking should be more flexible to allows such expenses as deductible in computing banking profit of such Nigeria. To the enterprenuers who want to establish bank in stale of their choice, they could be attracted to depressed area if more governors, banking incentives are made available for business established in such areas.