PROBLEMS OF BANKING SYSTEM IN NIGERIA

(A CASE STUDY OF CO-OPERATIVE AND COMMERCE BANK OF NIGERIA)

CHAPTER ONE

• Introduction 1

1.1     background of the study                                                          6

• Statement of the problem 9
• Purpose of the study 10
• Significance of the study 11
• Limitation of the study 12
• Statement of hypothesis 12
• Definition of terms 13

CHAPTER TWO

• Literature review 16

2.1     Definition of a bank                                                       16

• History of co-operative and commerce banks 20
• Types of banks and their functions 23
• The role of banks in the national economy. 25
• Types of problems facing commercial

banking industry in nigeria                                            29

• Competition in banking 46
• Organizational problem 49
• Causes of bank failure 50

CHAPTER THREE

• Research design and methodology 53

3.1     sources of data                                                               53

• Location of data 58
• Sample of data 59
• Method of investigation 60

CHAPTER FOUR

• Data presentation and analysis 61

4.1     tabulation of frequency result                                        61

• Test of hypothesis 67
• Analysis of data 71
• Interpretation of data 74

CHAPTER FIVE         

• Summary of findings, conclusions and recommendation 76

5.1     Discussion of findings                                                   76

• Recommendation 88
• Conclusion 90

Bibliography.                                                                 94

 

CHAPTER ONE

• INTRODUCTION

Banking business started as far back as the  seventeenth century.  When the receipts issued by Goldsmiths to depositors were used as a means of exchange in commercial transactions.  Because these receipts were accepted generally, they become transferable too.

A back is an institution where money and valuable are kept for safety purposes.  Banks also lead money known as loan, pay out money an the customer’s order by means of a cheque and bandraft and also give overdraft to customers.

 

The structure of banks can be grouped into the following namely:

1. CENTRAL BANK: This is the opex institution in the financial system of any country.  It is charged with the responsibility of managing the monetary polices of the government.  This was established in March 1958 and started full operations by 1^st July, 1959.  Which was after many banks like the West African Currency Board (WACB) in 1912, and the International Bank for Reconstruction and Development (IBRD) in 1955 failed to perform their objectives, and they later folded up.

 

2. COMMERCIAL BANK: This was started in Nigeria in 1892 with the establishment of African Banking Corporation and foded up in 18 93, then British Bank of west Africa [BBWA] was established in 1893. started operation in 1894 and later folded up too. May other bank come into existence which equally up. This is classified into three main groups which are as follows.

(a)     INDIGENOUS BANK: these are bank fully owned and controlled by Nigerian citizen including government. The first indigenous  bank in Nigeria was the national bank of  Nigeria (NBN), which started operations in 1933 followed by African Continental Bank Ltd (ACB) in 1947.

 

(b)     MIXED BANKS:  These are banks jointly owned and controlled by foreigners and Nigeria citizens including governments.

 

(c)      FORIGN BANKS (XPATRIATE BANKS):  These are banks fully owned and controlled by the foreigners.

 

The Nigeria Indeginization Act of 1972 Convert Most of these foreign banks which was Ider phased out ling time ago.  However, the 1995 budget has reintroduced the foreign (expatriate) trade in which banking system is an integral part of it.

 

3. MARCHANT BANK: This is a bank that specializes in providing financial services to commercial firms and industries.  This was established in 1964. this was established to assist large corporation , government, investor and individual in their financial  and management problems.

 

4        DEVELOPMENT BANK:  This is a bank sep up to handle special development projects in the country.  Also it help entrepreneurs by providing loans and consulting services to them, this is classified into the following groups namely:

• NIGERIA INDUSTRIAL DEVELOPMENT BANK (NIDB): This was established in 1964 to replace the investment corporation of Nigeria.  This assists the public and private sector companies.
• NIGERIA BANK FOR COMMERCE AND INDUSTRY (NBCI): This was established in 1973 to see to the financial implementation of the Enterprises promotions Decree of 1972.  this assist the indigenous businessmen.
• NIGERIA AGRICULTURAL AND CO-OPERATIVE BANK (NACB): this was established in 1973 with a capital of twelve million naira (N12 million) and is fully owned by the federal Government. This assists the agricultural sectors individual farmers and co-operative bodies.
• FEDERAL MORTGAGE BANK (FMB): This is a bank established by the government to help people build house by giving them ling term loans. The customers payback what they own the bank by mortgaging the land and house till they finished what they are owing.

 

5. SPECIALISED BANK: This is another type of bank which was established by the government and it includes the following namely:

• PEOPLES BANK OF NIGERIA: This is set up by Nigerian government in 1989 to help petty traders.  They also provide loans in groups at no interest rate, but an administrative cost of fifteen percent (15%) of the loan.
• COMMUNITY BANK: This was established in 1990, for rural development.  It was credited to bring the banks closer to the community to assist people in their business transactions and daily running.

 

Banking system is the system at which banks operates.  This is divided into four groups namely:

• UNIT BANKING: This is a type of banking system where the banks involved operate without branches.  This is commonly found where commercial banks exists.
• BRANCH BANKING: This system relates to a situation where there are few banks with a large number of branches.  This is then telling the readers that the banks seen here operate with branches.
• GROUP BANKING: This is a situation where three or more independent banks are brought together under one control through the exercise of majority share/stock ownership.

Despite the creation of all these banks by the government to aid entrepreneurship development.  The Nigerian banking system banking system still encounter a lot of problems which has disrupted its operation in the country.  This project will look at most of these problems and their causes and also provide possible solutions to avoiding these problems in the development of banking system.

 

• BACKGROUND OF THE STUDY

Commercial Banks as financial Institutions were established to cater for the savings and credit needs of small scale producers.  Commercial banks are the pioneering institutions in the art of banking followed by other banks.  The art of banking and industrial financial needs developed gradually and involved a lot of learning and perfection.  The early businessmen who were involved in this art learning and perfection were extra careful in management either because they could not accurately fore cost very well into the future or the risk involved in such find management was such that they could not by the use of the tools and techniques available to them totally avoid, or reduce to a manageable level .  pioneers of banking business realized early in life from the more unpredictable and the grate.  The risk involved in lending.

Moreover, for the fact that they could not predict the time their depositors will come for their money, they always keep their money handy-lending short.  This marching principle and the confidence of utmost good faith which characterized early banking practice was the hinge on which commercial banking successfully started.

As the economy grew, the need to hoslen growth of a particular segment of the economy may arise.  This may be through different finding to boost development in that sector, a priority which under normal circumstances, the existing financial arrangement could not after.  So the need to establish financial institutions, designed to act as catalyst, to provide the needed fund to galvanize the development of the less privileged sub-sector for the economy into action and to grow along with other sub-sectors of the economy.  In Nigeria, this need to provide and package special type of financing to some less privileged sub-sectors of the economy gave rise to the establishment of the people’s Bank, New Nigeria Bank etc.

In a barker economy, there was no financial needs as economic and social needs were met by a mere exchange of goods and services.  However, with growth and development, there arose financial needs of which commercial Banks adequately took care of but not for long.  With time the gap started again of which the existing commercial Banks could not fill.

It is quite unfortunate that some commercial banks not quite long after establishment will start experiencing multi – purpose problems.  Most of these institutions have ill-defined objectives-objective so broad that usually the institutions do not have the means nor the experience and capabilities to achieve them.  Further more political interference affects development institution.  Most of these institutions are mostly government owned banks and are prone to politics and government, interferences.  It becoming a norm that instead of appointing experienced and qualified persons as Board members of these institutions to make expert policies, political consideration favouritism takes upper hand with the result that Board members will not be contributing their best.  Also government direct or indirect interferences in the lending policies of these institutions, have not helped matters.  Lack of qualified and experienced staff to man, these institutions did not help matters, with the result that decision and results were not what are expected to be.  It is on this background that the research is carried on for effective check and control.

 

• STATEMENT OF THE PROBLEM

The problem in a nutshell includes such practices as fraudulent activities and mismanagement  by bank officials, poor liquidity and unavailability of adequate credits to deserving customers.

The phenomenon, technically referred to as “Bank distress” has become a regular feature in the Nigeria banking industry.  It connotes the erosion in the capital base of the enterprises which is commonly faceable to indigenous banks.  These banks as mentioned were set up by Nigerians with sloe objective of meeting the business needs of fellow Nigerians.  For instance the National Bank, when established in 1933, work towards catering for the interest of Nigerians.  The African continental Bank (ACB) was established in 1947, which aimed at assisting indigenous companies and individuals who were victims of the discriminating practices of foreign banks.  These banks have achieved a lot in the country since their inception irrespective of very serious set backs caused by unco-operative altitudes of bank debtors and hard regulatory policies as well as unpatriotic attitudes of the citizens.

 

• PURPOSE OF THE STUDY

The purpose of this project is to identify and provide possible solutions to the problems in the Nigerian banking industry.  So having identified the problems to which this study address itself, the researchers shall in this work, make a critical insight into the problems of banking system in Nigeria (case study of co-operate and commerce bank Plc Enugu) and determine the effects and reactions of the situations in the following:

1. The profitability of the bank.
2. Their reaction to the various policies of the government through central Bank of Nigeria and Nigerian Deposit Insurance corporation to correct their irregularities.

• The overall impact of these two situations on the bank existence and to their customers.

 

• SIGNIFICANCE OF THE STUDY:

It is of importance for banks and business organization to know the cause of the problems in the banking industry and the possible ways to solve them.

It will also and most banks and business organization to realize the need to encourage the growth in Nigerian banking industry that our banks should not be allowed to die having lived to their responsibilities.

The project will also make Nigeria realize the need for honesty, hard work and patriotism so as to encourage and inculcate banking habits not only to the mosses but also to the rural dwellers.  Also its project will serve as material for future research, economist and the economy of the country.

• DELIMITATION, SCOPE AND LIMITATION OF THE STUDY

The problems of Nigeria banking system is a very broad topic, but its project will concentrate on the indigenous banks with its scope being limited to the co-operate and commerce bank Enugu which has experienced in recent times a big short fall in its operation.

The Nigerian Deposit insurance corporation (NDIC) which was set up to monitor the activities of these falling bank in Nigeria declared the bank (ACB) in 1993 as one of banks distressed.

Other limiting factors as to the successful conclusion of the project was the inability of the members to visit other banks that are distressed at Enugu and other Eastern zone due to the limited time factor.  Owing to this fact, the members of the group decided to do with the available data.

 

• STATEMENT OF HYPOTHESIS

Using the information collected the researcher will attempt to test the validity of the following hypothesis

1. H^o: Banks in Nigeria are not lucrative because of problem facing them.

H₁:  Banks in Nigeria are lucrative upon the problem facing them.

2. H₁: The policy of central bank affect the operation of banks in Nigeria.

 

H_o:  The policy of central bank do not affect the operation of banks in Nigeria.

 

• DEFINITION OF TERMS.

The terms used in this work needs to be defined to facilitate the understanding of the reader.  As one of the greatest Greek philosophers Aristotle (348-322 B.C) would put it he says “Before a discussion can be intelligible there must be a definition of terms”.

 

In defining the terms used, this project will prove that its content has been intelligibly written as to avail the reader of acquiring knowledge.  Used are as follows:

1. A.C.B. African continental Bank Plc
2. PLC Public Liability Company
3. IBRD International Bank for Reconstruction

and development.

4. NBN National Bank of Nigeria
5. WACB West African Currency Board.
6. CCB Co-operative and Commerce Bank
7. BBWA British Bank of West Africa
8. FORIGN (EXPATRIATE)

(BANKS)    These banks are banks where 51 percent of their equity shares are held by foreigners.

9. ENTREPRE NEUR: One men business or sole business sector this means where one person organizes and manages a commercial understanding or business.
10. NDIC Nigeria Deposit Insurance corporation:  Thiscompany belong to the government and it’s is set up to help those banks that are distressed and to monitor their activities.
11. SFEM: Second-tier foreign Exchange Market.
12. CBN: Central Bank of Nigeria which is the Apex

bank

13. SAP: Structural Adjustment Programme
14. ABC: African Banking Corporation.
15. FM: Frequency Moderation
16. ESBS: Enugu State Broad Casting Service
17. BOFID Bank and other Financial Institutions Decree

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THE NATURE AND CONSEQUENCES OF JUVENILE DELINQUENCY IN NIGERIA: A STUDY OF ENUGU NORTH LGA, ENUGU STATE

Foreign Transaction For Dollars Payment :
Bank Name: GTBank
Branch Location: Enugu State,Nigeria.
Account Name: Chi E-Concept Int’l
 Account Number:  0117780667. 
Swift Code: GTBINGLA 
Dollar conversion rate for Naira is 175 per dollar. 

ATM CARD:  YOU CAN ALSO MAKE PAYMENT USING YOUR ATM CARD OR ONLINE TRANSFER. PLEASE CONTACT YOUR BANK SECURITY FOR GUIDE ON HOW TO TRANSFER MONEY TO OTHER BANKS USING YOUR ATM CARD. ATM CARD OR ONLINE BANK TRANSFER IS FASTER FOR QUICK DELIVERY TO YOUR EMAIL . OUR MARKETER WILL RESPOND TO YOU ANY TIME OF THE DAY. WE SUPPORT CBN CASHLESS SOCIETY. 

OR
PAY ONLINE USING YOUR ATM CARD. IT IS SECURED AND RELIABLE.

form>DELIVERY PERIOD FOR BANK PAYMENT IS  LESS THAN 24 HOURS

CALL OUR  CUSTOMERS CARE  OKEKE CHIDI C ON :  08074466939,08063386834.

AFTER PAYMENT SEND YOUR PAYMENT DETAILS TO

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 THE IMPACT OF FEDERAL GOVERNMENT TAX   POLICIES ON NIGERIAN ECONOMY 1995-2003.

ABSTRACT

The purpose of writing this research works.  The impact of federal government tax policies on the Nigerian Economy, is determine whether the federal government tax policies in Nigeria has contributed immensely to the overall growth of the economy.  It also seeks to investigation on the extent the polices of federal government tax has helped in revenue generation and allocation.

The literature review gave a background and in depth in the country and also the various policies banking them.

The decision made on this work was derived based on the test conducted. The chi-square was used in testing the hypothesis while frequency tables and percentage were used in analyzing the data.     The decisions were that  the federal government  tax policies is actually a regulatory frame work of revenue generation in Nigeria. While the other one is that the federal government tax policies has contributed to the growth of the economy.

Based on the above decision, some findings were made which necessitated recommendations and finally conclusions.

CHAPTER ONE

INTRODUCTION

• STATEMENT OF PROBLEM AND OBJECTIVES……………
• RATIONAL OF STUDY………………………………………..
• SIGNIFICANCE OF THE STUDY……………………………..
• BACKGROUND OF THE STUDY …………………………….
• DEFINITION OF TERMS ………………………………………

 

CHAPTER TWO

LITERATURE REVIEW

• THEORITICAL REVIEW
• EMPRICAL REVIEW

CHAPTER THREE

HYPOTHESIS, METHODOLOGY, SOURCES OF DATA LIMITATION OF THE STUDY.

• HYPOTHESIS OF THE STUDY
• METHODOLOGY OF STUDY
• SOURCES OF DATA
• LIMITATION OF STUDY

 

CHAPTER FOUR

DATA PROSENTATION, ANALYSIS AND DISCUSSION OF RESULT.

• DATA PRESENTATION
• ANANLYSIS OF DATA
• DISCISSION OF THE RESULT

 

CHAPTER FIVE

• SUMMARY OF THE ENTIRE WORK
• CONCLUSION
• RECOMMENDATION
• SUGGESTION FOR FURTHER RESEARCH

BIBLIOGRAPHY

APPENDIX.

CHAPTER ONE

INTRODUCTION

• PROBLEM IDENTIFICATION AND PURPOSE OF THE STUDY

The burden of tax falls heaviest on those with smallest income earning (odoh, 1998). An accurate record of business transaction and income tax becomes difficult. Some tax collection and assessors are dishonest.

 

There are cases of bribery and corruptions and also the cases of tax collections being prosecuted for misappropriations of funds collected from taxpayers.

 

Sometimes tax collectors went into the remote villages to collect tax but the problem of transportation might increase the difficultly. Also there is a languge barrier in the tax collection to raise money. Taxes are imposed to raise revenue for government for it to satisfy the peoples wants.

 

There is need for government to raise money for the provision of essential services such as the maintenance of law and order, the construction of roads and railways and the provision of health services, social and educational facilities. It is important because it is used to stimulate recovery from trade depression when unemployment is usually high, so to fight these ills there may be an increase in taxation.

 

PURPOSE OF THE STUDY

The Nigerian government has realized the need for revenue generation through imposition of tax on citizen so there are different objective for imposing tax in the country.

To detect the extent, the federal government tax policies have helped in revenue generation and allocation in Nigeria.

To find out the extent the federal government tax polices have contributed to the growth of the economy.

 

• RATIONALE OF STUDY

The federal government generates a large proportion of its revenue from tax.  The revenue generated from tax helped the federal government to provide for such things as national defence, security, Justice, transport, Communication and construction, health and education, while transfers from the fourth group and include employed retirement benefit consisting of pension, gratuities and public debt charges.

 

Tax controls inflation in an economy because when there is inflation in the economy, government can tax away the income in the hand of society and thereby reducing the aggregate demand, which will eventually bring the price down in the economy.

 

Government also levy taxes to discourage the consumptions of goods that are considered undesirable, goods welfare or those goods that create room for ostentation, wrong investment priorities or class distinction in he society (odoh 1998)

 

 

• SIGNIFICANT OF THE STUDY

The finding of this research will benefit both the government and community.  The government generates a large population of its revenue from tax and it s used to satisfy people wants and it is providing for such things are national defence, security, Justice, Construction of roads and railways and provision of essential services, health social and educational facilities.

 

 

Hence it is beneficent to both because taxes are imposed to raise revenue for the government for it to satisfy the people in a community.  Also it is used to stimulated recovery from trade depression, when unemployment is usually high.

 

 

 

• BACKGROUND INFORMATION ABOUT THE STUDY:

In Nigeria, many units of government, which in geopolitical jargon can be called junsdiction, carry out the fiscal operations.

Some fiscal functions are operated on a more centralized level which others are decentralized. Each of the three major fiscal functions are Allocation, distribution and stabilization, has economic reasons to be operated by each level of government. Taxation is the most important source of public revenue.

 

Tax is a levy, which a government imposes on the income of a citizen of a state for which the government makes no direct benefits to the payer.  It is a compulsory contribution imposed by government on private persona, groups and institution within the country. Since it is a company payment a person who refuses to pay a tax is liable to punishment.  But it is paid only by those who come under funsdiction. (Odoh, 1998).

 

The federal government generated a large proportion of its revenue from tax it is a compulsory contribution from corporate and natural person to government to defency the expenses incurred in the common interest of all with reference of special benefit conferred.  It is non-panel yet compulsory transfers of resources from the private on the prime sector, which must be levied on the basis or well-established criteria of equity, certainty, convenience.

 

 

Apart from using tax to generate revenue to finance her project, the federal government uses taxation for the purpose of influencing activities in the economy, thereby achieving its growth and stabilization policies. (odoh, 1998)

DEFINITION OF TERMS

Tax: Tax is a levy, which a government imposes on the income, or production and consumption of goods of the citizen of a state for which the government makes no direct benefit tax payer

 

INFLATION:  This is a general increase in price by the final consumer of goods and services because it is included in the price paid

 

VAT:   It is a tax on spending which is borne by the final consumer of goods and services because it is included in the price paid.

 

FISCAL POLICY:  Fiscal policy is the way or measure in which the federal government controls the circulation of money in the economy.

 

REVENUE – Revenue is the income or receipt of money by government. It could be said to be find or finance gotten by the government.

 

 

TAX BASE:  Tax base is the items on which the government levies the tax on.

 

 

TAX AVOIDANCE:  Is a way in which taxpayer illegally reduces, delay or avoid paying tax.  This is subject to punishment by the law court.

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THE NATURE AND CONSEQUENCES OF JUVENILE DELINQUENCY IN NIGERIA: A STUDY OF ENUGU NORTH LGA, ENUGU STATE

Foreign Transaction For Dollars Payment :
Bank Name: GTBank
Branch Location: Enugu State,Nigeria.
Account Name: Chi E-Concept Int’l
 Account Number:  0117780667. 
Swift Code: GTBINGLA 
Dollar conversion rate for Naira is 175 per dollar. 

ATM CARD:  YOU CAN ALSO MAKE PAYMENT USING YOUR ATM CARD OR ONLINE TRANSFER. PLEASE CONTACT YOUR BANK SECURITY FOR GUIDE ON HOW TO TRANSFER MONEY TO OTHER BANKS USING YOUR ATM CARD. ATM CARD OR ONLINE BANK TRANSFER IS FASTER FOR QUICK DELIVERY TO YOUR EMAIL . OUR MARKETER WILL RESPOND TO YOU ANY TIME OF THE DAY. WE SUPPORT CBN CASHLESS SOCIETY. 

OR
PAY ONLINE USING YOUR ATM CARD. IT IS SECURED AND RELIABLE.

form>DELIVERY PERIOD FOR BANK PAYMENT IS  LESS THAN 24 HOURS

CALL OUR  CUSTOMERS CARE  OKEKE CHIDI C ON :  08074466939,08063386834.

AFTER PAYMENT SEND YOUR PAYMENT DETAILS TO

08074466939 or 08063386834, YOUR PROJECT TITLE  YOU WANT US TO SEND TO YOU, AMOUNT PAID, DEPOSITOR NAME, UR EMAIL ADDRESS,PAYMENT DATE. YOU WILL RECEIVE YOUR MATERIAL IN LESS THAN 2 HOURS ONCE WILL CONFIRM YOUR PAYMENT.

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