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ABSTRACT
The desires to carry out this
research work on new banks grose from the fact that the central bank of Nigeria policy
on the establishment of these new in this country has been posing a lot of
problems, which resulted to the unsatisfactory performance, and problem
unpending failure of the new banks. This
paper therefore aims at examine the problem of these new banks, the impact of
these problem with banking industry and the possible strategies in by which
such problem cam be solved.
This research work is not in any way an exhaustive study of problem of
new banks in Nigeria because
to get a clear, through and exhaustive over view of these problem of new bank
in Nigeria
would involve a Leary expenditure beyond the finance of this research. The
following areas were therefore studies causes of bank failure. How to unproved
the safety of banks organizational problem of new banks project of new and
policy recommendation made, conscious of the fact that many unportant problems
relating to the subject were not treated because of time and money.
CHAPTER ONE
INTRODUCTION
Government, established bank for
development purpose and the role played by banking industry in an economic
development cannot be over emphasized Some banks are owned by government for
example first bank of Nigeria union bank etc.some by the combination of
government and individuals. However, banks in Nigeria and the other countries of
the world are established to carry out the following functions.
1, To safeguard money and over
valuables.
2, Mobilization of savings and
other deposits.
3, Extension of credit facilities to
customers.
4, Management of customer’s
investment and advising on insurance of maters.
5, Creating money.
6 provide facilities for the
financing of international trade example to commentary credit.
7, providing foreign exchanges
facilities for trade.
8, proving advising services
However, the above functions and duties of banks is just mention but, a
few because banking industry is dynamic in nature. It raries on public
confidence and due to its influence on the nation economic life, it need high
quality management and organizational structure with which it can attain
maximum operating efficiency and profitability.
Since the advent of structural adjustment programmed (SAP) and it’s
deregulating polities, banking industry in Nigeria has been receiving a number
of policy shocks and the new bank felt it most such policy or guidelines
include. The central bank of Nigeria
guideline in reserve requirement and limited capital based for establishing of
new banks.
Other directives are the withdrawal of government banks the payment of
interest on current account cancellation of foreign denominated naria loans.
The liberalization of foreign exchange market. The introduction of the
controversial national deposit insurance corporation apart from this policy the
new banks are facing other problem such as competition. The cause of these
competition that new bounds in the banking adverse is an increase in the number
of banks and the simultaneous invasion by other financial institution of what
had previously been regarded as the traditional banker preserve .the
establishment of number of branches in rural area where banking has not been
inculcated is another problem.
Some examples of the new banks in operation are:
Magnum.
Citizen
Inter-continental prudent.
SERVICES RENDERED BY NEW GENERATION BANKS
The new generation banks render the following services to their
customers.
1, depositing and withdrawal of
money in any of the branches a customers who banks with the branch of the bank
in Enugu can deposit or withdrawal such money in
any other branch in Enugu
and outside the town. This special service reduces the carriage of cash thereby
reducing the risks associated with carrying cash.
2, Internet computer services –the
services of some generation bank can be rendered through the Internet. The
banks can market their product through the Internet over the world.
3, Checking of accounting balance
through the electronic handsets. The new generation banks perfected the use of
electronics communication equipment like handset in sending account balances to
customers.
4, intern rants banking. The new
generation banks practice intern rant banking by moving to customers houses and
office to market their products this special services has no doubt increased
their over tremendously.
5, sponsoring world class sporting
activities. They are also involved in the sponsorship of world class sporting
activities like world cup, lawn tennis sports etc.
6, the new generation banks render
special services like business consultancy,
they write fecisibility studies for new business and advice their owners an how
commence business.
7, some of the new generation banks
get involved in courier service –during parcels, mail and special message for
their customers.
STATE OF PROBLEM:
The
major problem facing new bank in Nigeria has its origin from central
bank of Nigeria (CBN) guidelines or directive. These directives are of two
kinds -:
1
Directive on the establishment of new banks
2
Measures introduced to reduce liquidity in the economy-
These
measures affect new most because of their age in the industry.
Prominent among the measure which the
government pursues in this regards lies with the withdrawal of deposit of
parastal and other government agencies from financed intermediaries.
Other includes the cancellation of foreign
guarantee for naira denominated loan and the liberalization of foreign market.
These measures are enforced at the same
period and at a time when liquidity ration have already gone high. These
affected the new banks drastically because of their delicate capital base.
Secondly, the economic restructual programmed give rise to the devaluation of
naira as it sought for the actual valve of naira in the international market.
Such devaluation consequently led to high cost material and fixed assets, which
affected the development of new banks.
1.3
RELEVANCE OF THE STUDY
The objective is to known the problem
of new bank in Nigeria and to recommend will minimize the problem it is also to
recommend way of avoiding the problem in future considering the adage make has
while sunshine.
1.4
LIMITATION OF THE STUDY
Researcher
are faced with many limitation during research the limitation faced are no
cooperation with bank manager visited. Banks manager and workers when ask
question in certain thing they will not answer they be beating about the bush.
Secondly, non-availliabity of text book to
write out point. Thirdly, the problem of easily getting the appropriate data
due to bureaucracy which huders the information flow in the country.
Finally. Lack of adequate fund and time to
enable the research visit many places and collect necessary data.
1.5 SCOPE
OF STUDY
The scope of the study is to known the
problem facing the new banks in Nigeria,
how it was originated what brought the problem and the solution to the problem
and way of preventing future occurrence.
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