CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
This chapter
provides the background to the Nigerian banking industry in the year 2001 with
the Nigerian banks in focus.
It is indisputable that inspite of the
competition going on in the already existing banks within the industry. Many new generation banks still spring
up. These are as a result of several
factors like nature of services rendered by the banks their expansion plans,
the quest to meet up with profit margins acceptable by the body of stake
holders, seeking markets for their services etc.
During this period the banking industry
was misrepresented the banks who on longer consider the satisfaction needed by
their consumer, but are constantly reminded of the measures of expansion and
growth in line with their competitors.
The quest for
opulence has crept not only into the bank, but in all the members of staff
themselves and now manifesting into high rate of malpractices in the banking
sector.
One important variable of the desired
expansion in the banking industry is the cost of staffing, studies have shown
that bankers are well paid to encourage and motivate them to their respective
duties.
In order to meet
up with these costs. Maximum efficiency
needs to be put into avoid deficit.
As revealed by Nik Ogbulie viewing it
from all indications available, the banking industry is growing in leaps and
bounds. But what is yet to be fully
determined is whether this growth is informed by increasing rate of efficiency
in banking management or increasing
demand of banking services by users of the
industry. This becomes important
because the perceive rate of growth is not industry-wide.
While some banks
have remained big and strong still maintaining their mundane services
approach. The one that pep up services
are still not finding the bottom line easy and heap.
1.2 STATEMENT OF PROBLEM
The major research problem is to investigate and identify such factor
that influence proper management
function of the banking industry and to focus on the nature and forms of
professional misconduct in the industry.
It has been confirmed in Nigerian banks that professional misconduct
takes an upward trend in the sector and further discussed it on the part of
senior, middle and junior management staff.
These, Mr. Akintola Williams attributed to a number of lapse on the part of director and boardroom
rows. He reviewed existing procedures
for preventing identified misconduct and suggested modalities for dealing with
the problems.
Emphasis on individual responsibility was made. The pressure occasioned by the absence of
social security, the social demands of the extended family system
and poverty equally provide added reasons and motivation for fraud thereby causing the industry a big harm.
1.3 OBJECTIVE OF THE STUDY
1.
Describe the Nigerian banking industry performances.
2.
To describe and comment on the distresses in banking
sector during the period 1990-2003.
3.
To describe the contribution of the banking sector to
economic growth of Nigeria.
4.
To describe the impact of modern technological methods of
operation of banks in Nigeria.
5.
To describe any form of professional misconduct in the
banking sector in the last ten years.
1.4 RESEARCH QUESTIONS
The question developed in the
course of the research are as follows.
1.
What is the performance of the Nigerian banking industry?
2.
What are the distress faced with the banking sector
during the period of 1990-2003?
3.
What is the major contribution of the banking sector to
the economic growth of Nigeria?
4.
What is the impact of modern technological method of
operation of banks in Nigeria
5.
What are the forms of professional misconduct faced by Nigerian
banks in the last ten years?
1.5 PURPOSE OF THE STUDY
The purpose of this study is to identify the activities of the banking
sector in the year 2001 and to breakdown the boundaries between each segments
of the industry e study will enable us to look intently into the operation of the past years and to further
enhance the managerial decisions of the present period. It is no doubt that
information plays a vital role in a development plan. The essence of reviewing the banking sector
with restriction to a particular year like 2001 is an important measure for the
betterment of banking activities with in the Nigerian economy.
It is of paramount importance also to say that, the review will help to suggest ways in which such
lapses that go in the financial sector could be cradicated. It goes a long way in defining the activities and powers of
individual banks and those that have more financial strength is assets-order of
banking with in the Nigerian economy.
1.6 SCOPE OF THE STUDY
There are a lot of financial intermediaries within the economy but the
study is a direct research on the Nigerian banking industry for the specified year (2001) as a
focus. It is believed that the economic
strength of any nation depends Majorly on the financial structure. This research is based on the banking
financial structure. This
research is based was taken because
there is a very high concentration of banks in the Nigerian environment.
This
study does not encompass non-banking/financial institution but banking
/financial institution irrespective of the strength variations and geographical
locations.
1.7 LIMITATION OF THE STUDY
It is not usual to encounter certain problems in the course of
accomplishing this kind of an undertaking.
The nature of problems encountered manifest themselves in various shapes
and forms which range from the indifferent attitude of most Nigerians to
research. Lack of attention from
possible respondents, bias incorporative attitude of some people in providing relevant information and data
required for the study and of course. Lack
of adequate finance.
Another limitation or problem is poor literature on local errors due to
sample size used in computation of some banks in the sector. This resulted from some banks refusal to give
some vital information regarding their
operations.
In some other cases, where the questionnaire is being treated. It is treated with nonchalance and a deep
sense of laxity with the opinion that the researcher is trying to unveil their
concealed practices.
1.8 DELIMITATION OF THE STUDY
It is of great significance to note that this piece of work is not meant
to write up a text concerning the banks sector.
Rather, it is
meant to review the operations within 2001 in the industry, this work may draw
some references of importance from past year that are close by and recent years
after the period under study in an attempt to affirm the analytical report
required of this project. It is not also
a part of this work to judge or decide which bank is most appropriate or profit
oriented for consumers. The work is to have
a close are about the banking environment.
Any kind of probing or misrepresentation will not be entertained in this
project work.
1.9 SIGNIFICANCE OF THE STUDY
From the problem stated above as what prompted the need for this
study. It is obvious that this study is
a worthwhile financial analysis. It is
understandably a main effort to learn something
sensitive about problems facing
main effort to learn something sensitive about problems facing management of
banking sector in the Nigerian economy.
The value of results depends upon the skills with which the financial
research project is designed and implement effective project research involves
the following five steps: problem
definitions research design, field work, data analysis and report preparation.
Also the sector has created a lot of opportunities including employment
in the economy within the period under review and has contributed to
improvement in living standard of people
within the economy. This finding
will assist firms in the industry to improve their marketing strategies of
winning competitors through the first hand information about depositor’s
perception.
1.10 IMPORTANCE OF THE STUDY
There are a lot of importance associated with this study amongst which
are as follow:
1.
To have an overall view of the banking industry.
2.
To be conversant with the activities of banks.
3.
To make a reasonable comparison between the operation in
different years within banks.
4.
To emphasize the sectors importance as an arm in the
economy.
5.
to determine the level of importance of the various.
6.
To know how these banks have contributed to the
development of the locality in which they operate.
1.11 RATIONALE/JUSTIFICATION OF THE STUDY
This piece of work is not meant to using s or fault the activities
within the banking sector, rather. It is
meant to review the strength of our banking operations over the specified time
in the economy. It is meant to review
the development, if any, in the sector in recent years compared with the time
past. It will also reveal the importance
of the information technology introduced
into the banking industry. To figure out the strength of the banks with the
chains of activities taking place daily in the industry
1.12 ASSUMPTIONS OF THE STUDY
The assumptions of the study are summarized as following:
1.
That the study will present factual representation of
data as attainable in the industry.
2.
It is assumed that the researcher will reveal the effective
rate of operation in the sector within the stated time frame.
3.
It is assumed that the researcher will discuss the
inefficiencies of the banks during the said time
4.
That the writer
will suggest ways to correct whatever lapses found in the industry.
5.
The study is assumed to show the banks with more asset
value and those with less over the period.
1.13 DEFINITION OF THE TERMS INVOLVED
Carrying out this study, the population of interest involved banks
mainly, irrespective of names or offices.
The researcher made use of primary and secondary a, oral interviews,
questionnaires and desk research to generate information.
Also questionnaires will be designed and will be collected
accordingly. The analysis of data
received would be expressed in percentage, tabulated and a bar chat would be
used in presenting and analysis the data collected.
1.14 PLAN FOR DEVELOPMENT OF THE TOPIC
It is often said that for one to know how well he is in an
environment. He should consider his
paths. This study is one developed to
buring close to reality the fundamental managerial efficiencies as well as
inefficiencies.
It is often heard of that banks wind-up or are being wound up in the
Nigerian banking sector. Each time we
hear such reports about this giant industry our hearts begin to melt. Why it is the volume of deposits deposited by
the customers of such banks and the hazards the situation will create in the
economy that creates such sense of feelings to the public. It is pertinent However, to note that if
banks operations are reviewed from time to time, there will not be rooms for
sun inadequacies and where they are there would be quick measures to correct them.
In essence, the
plan for the development of the study is to create an up to date taking place
in the industry so as to maintain devotion, faithfulness and integrity of
management staff of the banking sector in the Nigerian economy.
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