CHAPTER ONE
INTRODUCTION
1.1
OVERVIEW
A financial institution is an organized body,
concerned with the management of money. This is to say that the institution is
responsible for the lending and borrowing of money. In other works, it is an
institution involved in financial intermediation where money is mobilized and channeled from the
public dialing (those who have surplus
fund and want to some to those who want to invest in productive activities)
some of the institution in Nigeria are “CBN, merchant bank, commercial bank,
insurance company, Development banks, stock exchange market etc.
Mismanagement is defined by “Land-man
English dictionary†as control or deals with private, public or business
affairs badly or unskillfully etc.
The
mismanagement is also defined by “oxford
English dictionary version†as mismanage, bad improper administration to manary badly or wrongly. Then financial
mismanagement according to the above definitions may be improper administration
bad or wrong use of money inadequate collateral security of granting loan mis
appropriation collateral of money or management of finance unskillfully.
The central
bank of Nigeria (CBN) is the open bank of a national that serves as the main
source of revenue to the government, it equality gives advisory measures to the
government. And also help the government extremely in international trade etc.
To the public and private individual bank especially
the commercial banks provides draftier support to the public and individual
affairs. The bank grant loans advances, make payment locally or outside Nigeria. In
fact they perform varieties of functions
to satisfy the financial needs of all types of customers from small personal
account holder to big incorporations and public organization. That is by
accepting deposits, safe custody agency services e.t.c.
This
industries have grown beyond optimistic expectoration over the year or period in
the number of bank that expanded in five years. The variety of bank increased
and the growth of the industries resulted to loss of professionalism in
services, increasing fraud owing to the craze for material wealth, inflating of
contract, God fatherism poor portfolio
and other back malsfeasence which has contributed extremely to the constant
report of financial mismanagement in a financial institution. The causes of
financial mismanagement and misappropriation of public funds are now rampant in these financial institutions.
Eve the workers in these
institutes had complained bitterly about hanger and starvation. Due to mobility
of the manger to pay of their salaries.
This has almost the time happened due to misappropriation and improper control
and utilization of funds ment for salaries.
Reports of riots, unrest or
strike of workers which bring a lot on
the economy not to function effectively due mismanagement by manager of this
financial institution.
In this case, mismanagement has
resulted to a great effect over many sections of life of the above mentioned.
Such as company, individuals, worker and
the economy as a whole. The tendency to
embezzle and get rich quick mentality his continued down the line. The serious act of financial
institution in Nigeria.
Furthmore, mismanagement in financial institutions has make them
unable to tackle their problem and obligation like paying of takes to the
government, cash reserved ratio workers salaries, giving our loan e.t.c
After the last over throvobment of
the civilian administration in the country many financial institutions made a
lot of staggering discovered to fund misappropriation through inflated
contract, bribery and kick backs etc. Since then Nigeria economy
has become a sick body up till today.
Mismanagement in these financial
institution had contributed to a large extent to the various drown-back, which
inhabit infrastructure workers salaries. This has also created a lot of
imbalance to the government in their revenues
generation, Necessary that a research of this kind is carried out for
possible solution to the problem of fraud mismanagement in banks.
In Nigeria today, financial institutions are among the important
institutions which are responsible for the countries economic growth without financial
institutions like companies, capital market etc. Nigeria and other countries will
find it difficult to framsalt business together financial institution like
banks perform some duties to the country, state public and individuals.
Some financial institution closed
up due to the fact that mismanagement closed up too and companies and
individual who have account in this bank lost.
During the period of the civilian
administration over thrownment many financial manage to survive through
inflated contract, briddery and kick
back etc, which lead the economy of Nigeria back ward, in fact financial
analysts put public fund to as been misused and equaling smuggled out of the
country a several billion of anria.
Finally, various officers mostly
the managers and cashiers of those institutions are accused of the abnormal.
The researchers went in deep to finding
out the true situation. Manager contributes a majority of the respondent
use.
1.2 THE
STATEMENT OF PROBLEMS
In this aspect it is well known
fact that adequate management in the financial institutions will enable them
play their roles as supposed. And achieve their basic aims and objectives as well as they planned it
earlier. But they have been unable to perform their rules ie, selling of securities, paying of tax which is a source
of revenues to the government.
Thereby encountering some
problems which may be started as following:
i.
They are finding themselves to meet customers with
dreads.
ii.
They is persistent loss
iii.
That, they are having poor turn-over
iv.
That they are having loss of trust by their customers,
in as much as not investing on them anymore.
v.
Unable to abide by relevant laws especially before the
financial ordinance.
vi.
Customer withdraw much from them thereby reducing
deposit abilities which constitute the main source of banks, loan ably funds.
vii.
That the issue has accommodated distress in the banking
system which has encouraged deterioration and failure in banking or financial activities thereby
reversing of the gains or profit made in the past.
1.3 THE
OBJECTIVE OF THE STUDY
Financial
institution have been identified as the
catalyst for a meaningful economic
transformation of the country. This is no doubt that financial institutions are
an important sector in the economy of Nigeria.
Financial
institution encountered a lot of
financial mismanagement lending to incapacitate. These are problems associated
with the interior operator ie, the managers, accountants,
cashiers etc.
I strongly
believe that, if the cause of the financial mismanagement in financial institution and its effects and
set of people it affect in identified, it will give way for easy and smooth
eradication or control in these institutions it affects such as banks, stock
exchange market, capital market etc. So as to achieve its objectives and aims
in life. It provides machinery for which medium and long term funds or loans
are mobilized and made viable to business government and individuals.
It provides
a base for capital formation and industrialization. It is in view of this that
I have taken up this course of study to examine thoroughly the cause of the
financial mismanagement as well as its effect and the people it affected and
how it affects them. In effect of this purpose. I want to find out the
objective of the study in this research work done.
i.
Employment of qualified staffs to fits in those
position
ii.
The roles of accountant to the public
iii.
Eradication of and fatherism in financial institution.
iv.
The way banks can built there internal and external
security to avoid fraud.
1.4 SIGNIFICANCE
OF THE STUDY
The
research work on the relationship on the cause and effect of mismanagement in a
financial institution can be of immense value to the banks and all other
financial institution. The result of this research work will enable the financial
institution to up-grade its financial security effectively especially in
eradicating fraud in a financial house.
This
research work will enable the financial institution to successfully and most
efficiently carry on the function in accordance with the set goals and
objectives of the financial institution.
Moreover,
this work will help to frighten the God fatherism syndrome and to pave way for
qualified graduates or experience workers to carry on this jobs effectively.
1.5 LIMITATION
ON THE STUDY
In the
course of this research work a lot of difficulties were encountered.
i.
Since it is limited to secondary datas, insufficient
book, journals, magazines hampered the smooth success of the research work..
ii.
The limitation of the research inquire as related to
time, distance and financial commitment
in transportation to libraries.
iii.
The banks course so many problem in providing the
research work with viable materials like statement, roll call of staff who are
qualified.
REFERENCE
ANIBUEZE B.C Banking
practice
HARNE JV.C financial
management and solely 4th edition practice-Hall
incorportited.
HAMSON J.C (1974)
Momentary theory and practice macbnald and
Evans phy month.
OGIH JOHN Banking
operation in Nigeria
ORJIH JOH Element
of Banking
OJO A.T Banking
and finance of Nigeria.
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