THE PROBLEM OF BANKING SYSTEMS IN NIGERIA.
Banking in Nigeria has gone through very changes within this decade. The industry has grown beyond optimistic expectation. Over the period, the number of banks expanded five fold, banking operations were substantially deregulated, competitions increased and banks were forced to be more innovative and service oriented.
Banking system is expected to offer effective and efficient services to its customers and the economy as a whole.
It is seen that a bank with limited problem will support and revitalize a respectable and dependable banking system.
Unfortunately, the uncontrolled rate of growth of the industry has produced undesirable side effects like increase in fraud and other form of banking malfeasance cash shortages while mismanagement, bankruptcy and illiguidity are found to cut across the whole banking system through the activities of board members.
These inspired me a lot to write on the project topic:
The problems of banking system in Nigeria
Chapter one serves as an introduction of the topic, which ex-rayed issues likes: Background of the study, statement of the problem, purpose or objective of the study, significance of the study and limitation of the study.
Chapter two is purely based on the review of related literature 1 used in the course of my study.
Chapter three dealt on research design and methodology, that is sources of my data secondly source only location of the data and method used in collecting data, literature work only.
Chapter four is purely based on the summary of my findings.
Chapter five is my recommendation and conclusion.
TABLE OF CONTENT
1.1 Background of the study
1.2 Statement of the problem
1.3 Purpose /objective of the study
1.4 Significance of the study
1.5 Limitation of the study
1.6 Definition of terms.
Review of related literature
2.1 Definition of a bank
2.2 Types of banks and their functions.
2.3 The role of banks in the National Economy
2.4 Types of problem facing commercial banking industry in Nigerian.
RESEARCH DESIGN AND METHODOLOGY.
3.1 Source of data (Secondary data only)
3.2 Location of data
3.3 Method of data collection (literature work only)
1.2 BACKGROUND OF THE STUDY
Banking business started as far back as the seventeenth century. When the receipts issued by Goldsmiths to depositors were used as a means of exchange in commercial transaction. Because these receipts were accepted generally, they became transferable too.
A bank is an institution where money and valuables are kept for safety purposes. Bank also lend money known as loan, pay out money on the customers order by means of a change and bank draft and also give over draft to customers.
The structure of banks can be grouped into the following namely.
CENTRAL BANK This is the apex financial institution which is charged with the responsibility of managing the cost, volume availability and direction of money and credit in an economy with a view to achieving some desired economic objectives.
This was established in March 1958 and started full operation by 1st July, 1959 which was after many banks like West African Currency Board (WACB) in 1912, and the international bank for Reconstruction and Development (IBRD) in 9155 failed to perform their objectives, and they later folded up.
COMMERCIAL BANK: They are financial which carry out the ordinary banking business of receiving deposits, advancing loan, discounting bill and offering related services to the general public. This started in Nigeria in 1892 with the establishment of African Banking Corporation and folded up in 1893. Then British Bank of West Africa (BBWA) was established in 1893, started operation in 1894 and later fold up too. Many other banks came into existence, which equally folded up. This is classified into main group, which are as follows.
INDIGENOUS BANK: These are banks fully owned and controlled by Nigerian citizen including government. The first Indigenous bank in Nigeria was the National Bank of Nigeria (NBN). Which started operation in 1933 followed by African Continental Bank LTD (ACB in 1947.
MIXED BANK: These are bank jointing owned and controlled by foreigners and Nigerian Citizens including government.
FOREIGN BANKS (EXPATRIATE BANK): These are bank fully owned and controlled by the foreigners.
The Nigerian indiginization Act of 1972 converted most of these foreign banks, which was later phased out long time.
However, the 1995 budget has reintroduced the foreign (expatriate) trade in which banking system is an integral part of it.
MERCHANT BANK: This is a bank that specialize in providing who engaged in whole sale banking, medium and long term financing, equipment leasing debt factoring, investment management, acceptance bills and management of unit trust. This was established in 1964.
DEVELOPMENT BANK: This is bank which specialize in providing long term fund for industrial, agricultural, commercial and mortgage development.
Also, it helps entrepreneurs by providing loans and consulting services to them. This is classified in the following groups namely.
NIGERIAN INDUSTRIAL DEVELOPMENT BANK (NIDB)
This was established in 1964 to replace the investment corporation of Nigeria. This assists the public and private sector companies.