The banking act of 1960 defined banking as business. The business of receiving monies from outside sources as deposits, irrespective of the payment of interest, and the granting of money loans and acceptance of credits or the purchase of bills and cheque and sales of securities for accounts of others. Bank may define as any person or corporation, that provides the minimum banking services and which is licensed as bank by the federal government of Nigeria a banking institution.

1.1 BACKGROUND OF THE STUDY

The development of new generation bank in Nigeria can be traced back to merchant in the former west Africa colonies created, the need for locally base. Financial institutions for many has been replacing the old barter system, and the British silver currency was increasing used in business transaction, government and individual for investment. The need for new generation bank is to import these coins, distribute them and absorb any surplus.

Moreover, the story of financial institution in West Africa may be traced back to 1891, following an attempt imitated by the chairman of elder demister. & company, a shopping company which operated between West Africa and liver-pool.

In 1892, the Africa banking corporation was incorporated following by the bank of British West Africa in 1894 to serve the bankers aspiration of Nigerians. In 1916, the colonial bank was established and was take over in 1925, by Barcloys bank. Together with the Angjo Egyptian bank the national bank of South Africa, they were converted to the Barclays bank.

1.1 STATEMENT OF PROBLEM

The government through C.B.N. has succeeded in persuading commercial banks to open up branches in new generation areas, to see how government polices are put to practice and to identify the problems encountered by these banks in the process of opening up branches in new generation bank in areas. The problems observed so far are.

1. Why the structural arrangement and management of Nigeria commercial bank as hindrance to the extension of bank services to new generation bank in areas?

2. Why manpower constraints?

3. Why poor infrastructural facilities and accommodation to this new generation bank?

3. Why the pessimistic attitude of bankers towards themselves has also contributed to the problems affecting the new generation banking programme?

1.4 THE SIGNIFICANCE OF THE STUDY.

The importance of this study is to find out if the rural population has become aware of branch banking in their communities. It is also to find out if the programme has achieved its aims of promoting and cultivating the banking habits, mobilizing rural savings, provision of credit for small-scale ventures and creating employment opportunities in the rural communities. There is also the need for deliberate policy monetary authorities aimed at strengthening the banks and the use of cheques in rural areas instead of demanding for cash.

This study will show how far the commercial banks have complied with the CBN guidelines on rural banking development.