BANKING DISTRESS IN NIGERIA CAUSES AND IMPLICATIONS

A PROPOSAL 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.   1.3       OBJECTIVE OF STUDY           For the purpose of this research, the researcher has decided to know the following as regards to the topic “The Banking distress in Nigeria, cause and Implications.   Such objectives are: To investigate what is banking distress To inquire when it started in Nigeria To ascertain the causes To identify the implications in the economy To proffer the possible solution to the problem.   1.4       SIGNIFICANCE OF THE STUDY           The findings of the research works together with its conclusion and recommendation will be of importance in the following regard to future researchers. Although, this work represents a significant attempts, it is not exhaustible at the: TIME FACTORS:  Time is a major constraining factors.  This is obvious, since the researcher work hard to be completed with a specified period time, other academic programme.   LACK OF SOME STATISTICAL DATA:           All this statistical data needed for the study could  not be gotten by the researcher in local government, under study and using other data from other local government are irrelevant.   LACK OF ADEQUATE KNOWLEDGE:           Lack of knowledge is another problem the researcher encountered on the course of this study.   1.5       LIMITATION OF THE STUDY           During the research work, the researcher encountered some constraints.  Therefore, this research is limited to the adequacy affair of the information at the disposed of the research for the purposed of this study, the following limitation are worthy of note.           FINANCE; this research was condition within the limits of the financial resources of the researcher e.g in collecting the relevant materials.           Also, we do see many annual reports showing huge profits made by these banks, newspaper reviews on the assets and liabilities of banks, employment of best staff and good management background.  Still all these efforts seemed to be fruitless over bank distress.  What then contributes to these bank distress. REFERENCES Orjih .J. (1998),            Seminar in Banking and Finance                                       Enugu.  Immaculate Publisher. Ozo .J.U. et al (1999)  Introduction to Project writing,                                       Enugu: Sunny Publisher. Ukemenam C.O. (2001), Practise of Banking,  Enugu,                                       Oketel Publishers. Orjih .J, (1996),            Business Research Methodology                                       Enugu, Metson Publishers. Anyamu J.C. (1993)    Monetary Economics                                       Nigeria Hybrid Publishers. Get the Complete Project Material Now!!!