The term banking embraces all the activities of a bank which engages in any of the following functions such as receiving investing lending exchanging serving of money and clams in other domestic and international transaction.

The tendency to act in a certain way o manner customary relating to banking transaction is referred to as banking habits relative to this definition one easily understand that what is being referred to as transaction or informal banking institution because they perform the function of modern banking institution though in an unrefined form.

A rural community is a conglomeration or amalgamation of serve villages in this country majority of our people live in the rural communities.

Farming is the major activity and as such agriculture is their main sources of income other rural activities are trading food processing wearing tolls fabrication and poverty. These activities provide substantial amount of income for the rural population. Establishment of institutional infrastructure like banks in such areas will ought to cater for their financial needs by mobilizing their resources into savings and extended credits for rural dwellers there by fostering their productive capacity. But a great number of rural dwellers do not use banking facilities for a number of reasons including the existence of informal banking institution.

These informal banking institutions like their urban counter parts engage to a large extent in financial interpretation some of the informal institutions includes Age grade, Town union local money lenders family funds and married women association. The peculiar reasons which endeared the rural dwellers to informal banking institutions and ways of fostering enhancing and indicating modern banking habits in our rural communities.

1.1 STATEMENT OF PROBLEM

After a careful analysis of answer form the respondents the researcher discovered that the major problem militating against rural communities are as follows:

- Lack of modern facilities like computer institution.

- Lack of staff commitment

- Inadequate staff training for this purpose

- Unorganized internal structure of the bank

Another problem of banking in rural communities is absence of adequate collateral security by borrower or customers collateral is some things that the bank is willing to hold against the loan it gives to its customers. The banking system has not been able to operate effectively particularly in the area of economic development because of the inadequacy of organized and developed stocks and securities markets like the stock exchange.

Also another problem of banking in Nigeria is the mass illiteracy of the people particularly in the rural areas of the country. The localization of most of our banks in the cities constitutes a problem of its own because the illiterates in our rural areas will prefer to hoard or keep their money in their houses than going to the bank to deposit them. just for the obvious reason of not spending money in going to the bank to with draw or deposit money for one may not like to spend N50 for transport in going to the bank to withdraw or deposit N100.

1.2 OBJECTIVE OF THE STUDY

i. To foster the activities of banking especially in the rural areas.

ii. To critically examine the operations of informal banking institutions with the view to finding its short comings and influence upon the rural dweller and also finding a possible solution to its short coming

iii. To identify the reasons responsible for the continued existence of informal banking institutions.

iv. To also identify the reason why modern people or dwellers.

v. Finally to make recommendations aimed at fostering improving and enhancing services of informal banking in our rural communities.

1.3 SIGNIFICANCE OF THE STUDY

This very research work will be of paramount important to rural bankers in particularly and other interest group at large whether corporate or individuals.

i. The rural dweller makes greater use of the service rendered by informal banking institutions.

ii. The informal banking institutions have survived because of some unique services they render to the rural dwellers.

iii. The informal banking institution have existed because of cultural elements in traditional society.

1.4 LIMITATION OF THE STUDY

The researcher concentrated their works upon the banking habits in rural communities. Therefore the view expressed here by the author can represent what is mostly prevalent in the country some rural communities have a common way of life.

Nevertheless findings on this reports could be applied in other branches in the rural areas since the operation and procedure are basically the same all over the rural areas.

1.5 DEFINITION OF TERMS

Some of the words used are defined below:

- Banking: This is the activities of the bank which engages the functions of receiving investing lending exchanging servicing money and claims in domestic and international transaction..

- Banking habits: This is the tendency to act in a certain way or manner customary or relative to banking transactions.

- Rural community: Is a conglomeration or amalgamation of serve villages. They can also be called primitive society