ABSTRACT
This project work is the challenges
facing the Nigeria
banking industry. The history of Nigeria
banking can be traceable in the early 1820’s with the African banking
corporation that was established in Lagos
but the corporation did not last as a result of banking habit of the people and
consequently ceased operation in 1890.
This project has to do with the problems competitions government
interventions, distresses been experienced in the Nigerian banking industry in
this present day activities of the banking sector.
This study will attempt to bring on
various problems but could be caused and the challenges for customers and also
offer solutions on how it could be circumvented.
The study which is not a result of one research but a contribution of
research ideas examines the different measures adopted at different occasions
by the central bank of Nigeria
to curb the challenges facing the Nigeria a banking industry.
The research methods used are
primarily secondary since primary data cannot be effectively used at this state
of learning. The researcher made use of both historical and survey research
method carrying out this investigations.
Finally, findings recommendations and conclusions are drawn. Based on
the objectives the findings revealed that challenges has to do written
competition as far as banking industries in Nigeria are concerned, and that
distress can be run into as a result of these challenges in the banking
industry. Based on the findings, recommendations are made on how to improve the
challenges facing the Nigeria
banking industry.
TABLE OF CONTENTS
TITLE
APPROVAL
DEDICATION
ACKNOWLEDGEMENTS
ABSTRACT
TABLE OF CONTENTS
CHAPTER ONE
INTRODUCTION
1.1 HISTORICAL BACKGROUND OF THE
STUDY BANKING IN NIGERIA
1.2 STATEMENT OF STUDY
1.3. OBJECTIVES OF STUDY
1.4 RESEARCH QUESTIONS
1.5 PURPOSE OF THE STUDY
1.6. SIGNIFICANCE OF THE STUDY
1.7 SCOPE OF THE STUDY
1.8 LIMITATION OF THE STUDY
1.9DELIMITTION OF THE STUDY
1.10 IMPORTANCE BENEFIT OF THE STUDY
1.11 RATIONABLE JUSTIFICATION OF THE
STUDY
1.12 ASSUMPTION OF THE STUDY
1.13 DEFINITION OF TERMS
CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1 INTRODUCTION
2.2 ACTIVITIES OF THE BANKING
INDUSTRY IN THE PRESENT DAY IN NIGERIA
CONIVERSAL BANKING
2.3 INTRODUCTION OF UNIVERSAL BANKING
IN NIGERIA
2.4 GUIDELINES FOR THE PRACTICE OF
UNIVERSAL BANKING IN NIGERIA
2.5 ACTIVITIES THAT BANKS CAN
UNDERTAKE
2.6 EXPERIENCES ON BANK (DISTRESS AS
A RESULT OF (COMPETITION) CHALLENGES) CHALLENGES FACED.
2.7 CAUSES OF DISTRESS IN BANKING
INDUSTRY
2.8 BRIEF SURVEY OF BANK DISTRESS IN NIGERIA
2.9 MANAGEMENT OF BANK DISTRESS
REFERENCE.
CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY.
2.10
METHOD OF DATA COLLECTION
3.1
SECONDARY METHOD OF DATA COLLECTION
3.2 LOCATION OF DATA
3.3 ANALYSIS OF DATA.
CHAPTER FOUR
SUMMARY OF FINDINGS
4.1 SUMMARY OF FINDINGS
4.2 DISCUSSION OF RESULT
CHAPTER FIVE
CONCLUSION AND
RECOMMENDATIONS
5.1 CONCLUSION
5.2 RECOMMENDATIONS
BIBLIOGRAPHY.
CHAPTER ONE
INTRODUCTION
HISTORICAL BACKGROUND OF COMMERCIAL BANKING IN NIGERIA
The historical background of
commercial banking in Nigeria
can be traceable to early 1820, where the African banking corporation in Lagos established a
commercial bank. These corporations did not last due to some limitation
encountered as a result of banking habit of the people and consequently leased
operation in 1890. However, in the same year. The British bank of West Africa
(now know as first bank plc) was also in corporate in London
and became operational in Nigeria
in 1894. Moreover, this bank enjoyed absolute money of banking business in Nigeria a until
1916 when colonial bank was established.
Due to the dynamic and aggressive operation of colonial bank, there was
a reduction in the dominance of the BBWA (British banking of West
Africa). In 1925 a consortium of three banks (banclays bank Anglo
Egyptian bank and national bank of South Africa) took over the assets
and liabilities of colonial bank and metamorphosed as banclays bank D.C.O.
(dominion, colonial and over seas). Consequently, following the emergence of
banclay D.C. O. (now on bank of Nigeria of plc) other expatriate bank of west Africa
bank of America chase, mantiattan bank etc. it was observe that the expatriate
interest and this led to the establishment of industrial and commercial bank in
1929 with the primary aim of taking care of the special banking interest of
Nigeria entrepreneurs. Mean while this bank went into liquidation in 1930.
In additional of the indigenous bank were established which comprise of
the Nigeria
merchant bank (1931), national banking of Nigeria plc (1933), agbomagbe bank
ltd (1945) African continental bank plc (1947). The indigenization decree of
1973, bought to an end of the operation of expatriate banks in Nigeria as the
decree empowered the federal government to acquired 40% equity share of all
expatriate banks.
STATEMENT OF STUDY:
The task of this study is to identify the extent of
challenges facing the Nigeria
banking industry. The effect of these
challenges to either the reduction or increasement of response time to her
customer needs.
It is a well- known
fact that the competition in the new generational banking activities is
beginning to give concern to both rich and poor of this economy. Though
attempts has been made by both government and private bodies in trying to look
into this word “challenges†been faced by trying to meet up with task of answering
new generational bank in the services multiple or universal been rendered by
banks nowadays. However, though then central bank of Nigeria has also tried her best in
look into this problem by the services she renders to these banks such debts.
Management functioning, monetary function just to mention but few but still
none of this aforementioned function seems to help the situation. Therefore, the so considered dynamic out of
all which is the monetary function which has to such monetary control techniques
which is as follows:
·
Open
market operation
·
Bank
rate
·
Moral
suasion
·
Liquidity
ratio
·
Legal
reserve ratio
·
Special
deposits.
But yet this efforts by the CBN
(central bank of Nigeria) seen not to help the situation rather distress are
increasing in the banks industry, as we earlier commented that our concerns is
not really diverted towards bank distress or her survival rather we are
considering the challenges faced by banks in Nigeria which distress can be
given birth to by this challenges as the case may be.
For instance, just recently in the
month of August 2005, it was saw tread
in the financial news paper that some banks in Nigeria are about or
experiencing distress signals in their activities / business which i consider
is as a result of the challenges been faced. Efforts made by most banks in
trying to meet the leaking gap involve in some illegal transaction with some
wicked or 419 big men in Nigeria.
Who have selfish interest and out there to enrich there self by all means no
mater what it will cost and care who is been hurt.
OBJECTIVE OF STUDY
1. To find out the importance of
challenges and the effect in the banking industry and sophistication of the
business of new generation banking in the country.
2. It helps in improving banking
operation, competitiveness and productivity.
3. It help to identifying the extent to
which this challenges been faced by banking in Nigeria has contributed.
4. Therefore, the study to find out an
over view of this challenges to the various services being rendered in our
bank.
5. It also attempts to find out the
various problems that could be experience with this talk “challenges facing Nigeria banking
industry.
1.4 RESEARCH
QUESTION
The research question in line with the topic as thus:
1. What is a challenge?
2. What are the importance of
challenging as and the effect in the banking industry?
3. What extent could challenges been
faced by bank in Nigeria?
4. What are the studies to find out
account on over – view of these challenges to the various services being
rendered in banks. ?
5. What are the problems that could be
experienced with the challenges facing Nigeria banking industry?
6. Is there really any challenges?
1.5 PURPOSE OF THE STUDY
The purpose of this study is to know the extent of the
challenges in connection with our present day banking activities, what it has
contributed and bad or adverse effect of it also is to be considered.
Also this purpose of
this study is to what challenges are been faced by banking industry in Nigeria today.
And now this has affected the banking operation in Nigeria via the establishment of
new banks.
Also effect will be
made to know if these challenges also affect customer’s transaction power or
strength in the banking industry. The effectiveness of these challenges to the
economy management of banking the government of Nigeria and private persons just to
mention but few.
1.6 SIGNIFICANCE OF
THE STUDY
The context of this
study would be directed to actual activities of banks today. It would help in
laying a foundation for any body who dose not have any experience about
commercial banking in Nigeria
to have a better understanding of it.
Also to be brought to
light is the public misconception about compactions and to correct this
misconception of people about the new generation banking activities.
Specially, the issue
being studies here are effect of this
challenges task be experience by most new generation banks with a view of
dominating the negative aspect of this challenges in the bank industry in line
with the day to day bank transaction,
suggestion for its remedy will advanced.
1.7 SCOPE OF THE
STUDY
The study “challenges facing the Nigeria
banking industry†is focus at identifying, the extent of the challenges to the
various services being rendered by banks in Nigeria and how this challenges
have affected out put efficiency.
This study will also
attempt to bring out various problems that could be caused via these challenges
for customers and offer solutions on how it could be circumvented. The scope to
be covered by this work will be all banks in Nigeria. Because of the many
services that could be offered by the banks on aspect of their operation,
retail banking is considered for the purpose of this study also.
However, the
contribution of this topic “challenges facing the Nigeria banking industry†to the
establishment of new banks, and their survival in the mist of this challenges.
1.8. LIMITATION OF
THE STUDY
Limitations encountered by the research work are financing
and uncooperative attitude of respondents.
FINANCE: Book of the economic difficult that Nigeria is
posing through, it is very difficult to have every money to achieve ones
crucial deserves. A research of this nature quizzes money. A lot of money
required for typing, running of questionnaire traveling to places for the
project. Un-co-operative attitude of respondent, some respondents were out
right hostile and very important to entertain genuine requests. There were also
bureaucratic bottlenecks that frustrated those researchers attempt of secretary
some official documents.
However, these
constraints did not destroy the infrequent of this research.
1.9 DELIMITATION OF
THE STUDY
In the course of this study, it would have been very
important to look into banks individually but it will cost much more finance,
time etc. so we have decided to group the banks under one umbrella.
Also activities
coursing distress of bank would have also been look into but due to the
limitation experienced in the course of this study will not be able to make it.
1.10 IMPORTANT
/BENEFIT OF THE STUDY
Most importantly, this study bring to light the type of
challenges been experience by most banks in Nigeria today. Also it makes it
possible for some one who dose not have idea about knowledge of it.
In addition, the
researcher and any reader of this work to contribute suggestion individual and
to know governmental view to topic and that of the private and public.
1.11 RATIONAL
JUSTIFICATION OF THE STUDY
This topic challenges facing the Nigeria banking industry is really
justified by the activities taking place in the banking industries the day, the
issue of new generational banking system, competition of banking. Intervention
of government just to mention but few in the banking activities of Nigeria
1.12 ASSUMPTION OF
THE STUDY
It is assumed that banking activities in Nigeria is a
would of competition and it is place of challenges where every bank wants to
meet the current banking activities in the country. It is also assumed that
every bank is trying by all possible means to face this challenges and not be
left a side or behind in the current trend of banking activities.
1.13 DEFINITION OF
TERMS INVOLVED
In the course of this study, a number of terms will be
encountered that are not what might have measuring that are subject discussion.
Attempts will be made to
explain what these terms will mean in this study. Because of the in- tech
native of the study there are given a number of these terms. They include:
1. Distress
2. Banking sector
3. Challenges
4. Commercial bank
5. Universal banking.
1) DISTRESS: this
can a also be expressed as liquidation bank ruptcy. Hat is where a person,
company, government, bank etc.can no more met her financial obligation sand
cannot more financial†activities.
2)
BANKING SECTOR: This can be express as a the section
of our country or this country that are refereed to as those involve in banking
services such as acceptance of deposit, payment of cheques on with drawl
3)
CHALLENGES this can be express an influences
tiers, oppositions, competition etc. encountered in the banking rend. It also
can be refereed to as efficiency and affectivities as the case may be.
4)
COMMERCIAL BANK: section of the banks and other
commercial institution (BOFD) Decree NO25 of 1991, defined commercial bank as
any bank in Nigeria
whose business includes the acceptance of deposit, with drawl by cheques.
Section 9(2) of the decree also stipulates that a commercial bank must have a
minimum paid up share capital of fifty million naira ( N50m)
5)
5. UNIVERSAL BANKING –according to the government of
central bank of Nigeria in the exercise of the power contented on him by the
provision of section b1 on banks and other financial institution decree (BOFID)
1991 as amended, has approved issuance of the following guidelines to all banks
for the implementation of universal banking in Nigeria with effect from January
1, 2000.
REFERENCE:
ANIBUEZE BEN CHUKWUEMEKA (1999)
“Banking
practice
Volume … Africa publishers’
page 21, 22, 23, 24, 243, 32.
CHARLES OBIORA UKEMENAM (2001) “PRACTICE
OF
BANKING FOR STUDENT & PROFESSIONALS OKEKE PUBLISHERS PAGE 398.
Get the Complete Project Material Now!!!
