COMMERCIAL BANKS LIQUIDITY PROBLEM

AN EMPIRICAL ANALYSIS

(A CASE STUDY OF FIRST BANK AND UNION BANK PLC)

CHAPTER ONE

1.0     INTRODUCTION

• BACKGROUND OF THE STUDY
• STATEMENT OF PROBLEM
• OBJECTIVE OF STUDY
• RESEARCH HYPOTHESIS
• SIGNIFICANCE OF THE STUDY
• SIGNIFICANCE OF THE STUDY
• SCOPE AND LIMITATION OF THE STUDY
• BACKGROUND OF THE FIRM STUDY
• DEFINITION OF TERMS

CHAPTER TWO

• REVIEW OF RELATED LITERATURE

2.1     OPERATIONAL CONCEPTS IN NIGERIA COMMERCIAL BANKS.

• LIQUIDITY RATIO
• SIGNIFICANCE OF LIQUIDITY RATIO
• COMPUTATION OF LIQUIDITY RATIO
• CASH RATIO
• LIQUIDITY RISKS
• LIQUIDITY MEASUREMENT
• DETERMINING LIQUIDITY NEEDS
• RATIONAL FOR LIQUIDITY RATIO REQUIREMENTS
• FACTORS AFFECTING LIQUIDITY OF COMMERCIAL BANKS
• LIQUIDITY PROBLEMS OF COMMERCIAL BANKS
• CAUSES OF LIQUIDITY PROBLEMS IN COMMERCIAL BANK
• FEDERAL GOVERNMENT STEPS TOWARDS SOLVING LIQUIDITY PROBLEM IN COMMERCIAL BANK
• APPRAISAL OF THE GOVERNMENT STEPS TOWARDS SOLVING LIQUIDITY PROBLEMS IN COMMERCIAL BANK
• SUMMARY

CHAPTER THREE

• RESEARCH METHODOLOGY

3.1     RESEARCH DESIGN

• AREA OF THE STUDY
• POPULATION OF STUDY
• SAMPLE AND SAMPLING PROCEDURE
• INSTRUMENT FOR DATA COLLECTION
• VALIDITY OF THE INSTRUMENT
• RELIABILITY OF THE STUDY
• METHOD OF ADMINISTRATION OF THE INSTRUMENT
• METHOD OF DATA ANALYSIS

CHAPTER FOUR

• DATA PRESENTATION

4.1     TESTING OF HYPOTHESIS

• ANALYSIS AND INTERPRETATION OF RESPONSES

CHAPTER FIVE

• DISCUSSION IMPLICATION RECOMMENDATION

5.1     DISCUSSION OF RESULTS

• CONCLUSION
• IMPLICATION OF THE STUDY
• RECOMMENDATIONS
• SUGGESTION FOR FURTHER STUDY
• LIMITATION OF THE STUDY

APPENDIX

BIBLIOGRAPHY/REFERENCE

CHAPTER ONE

• INTRODUCTION

1.1     BACKGROUND OF THE STUDY

Liquidity of banks is “the case with which banks assets could easily be converted into cash”. The liquid asset include cash in bank vaults, and other government securities that have not been used as collateral for loans. The most liquid of all these assets is cash.

 

These are many reasons why a bank should have reasonable liquid assets in its assets portfolio. These includes amongst others to babble the bank to meet prompt demands from deposits and to ensure that the bank main trained public confidence and also beadle to utilize profitable opportunities that may come out in future.

 

However, it should be mentioned that banks like most other business are profit oriented. They operate in order to make profit for their shareholders. The profits could duly be realized only if there is adequate deposits from bank customers. The deposits will not come unless the depositors could be assured of the safety of their deposits and for the safety of the deposit to be assured, these has to be enough liquidity in the bank.

 

Conversely, a bank operates in order to make profit for her shareholders. It is a known fact that action designed to make profit in banks may bring about bank distress and vice versa. Therefore, equilibrium has to be sought between the two. These taken extreme cases, have been the constant concerns of bank management.

 

Liquidity management involves provision for depositor drawals and short term cash requirements. It also involves the provisions to meet legal reserves requirements and for the cyclical and secure cash requirement.

 

In Nigeria, the activities of the banking Act of 1969 as amended under the control of Central bank of Nigeria. The essence of these regulations was to maintain trust and confidence in banking system as well as to achieve specific economic objectives. Thus in the period of mounting excess liquidity as was the case in the 1970s the banks were expected to hold some of their deposits in liquid form.

 

This is known as legal reserve requirements and cash stabilization securities issued by the Central bank, the liquidity ratio requirement and special deposits.

 

The rationale for the use of these instruments was to mop up the excess liquidity in the economy to great extent, is also expected to enhance bank in the banking system.

 

The problem of bank liquidity management was brought about as a result of continuous inflows of income from the oil sector in the 1960s. Since the introduction of the second tier foreign exchange market which resulted in the mopping – up of more than N56 million from the economy, the situation has automatically changed, so the era of excess liquidity has gone.

 

Banks have devised new methods to attract deposits from their customers hence the new devices of marketing financial services and other innovations in the banking sector. Some questions which this research intends to address includes:-

How does central bank policies on commercial banks solve excessive liquidity problems in the banking system and the national economy?

 

1.2     STATEMENT OF THE PROBLEM

This research is intended to identify problems of selected commercial banks prior to the introduction of the second tier foreign exchange market and under the second tier foreign exchange market operation. Bank liquidity either in excess or shortage constitutes operational and management problems. Positive responses of bank liquidity to monetary policies may resolve such liquidity problems in the economy.

 

In Nigeria, regulatory and monetary policies appears to be ineffective hence the recent distress problems associated with some banks. However, the nature and extent by which commercial banks liquidity problems responds to monetary aggregates is not known. This informed the need to re-examine the bank liquidity problems, with the over all objective of investigating the nature and extent of these problems.

 

1.3     OBJECTIVE OF THE PROBLEM

The broad objective of this problem is to examine liquidity problems and their policy implication both in the banking industry and Nigeria economy.

 

Specifically the objectives are to:-

1. Identifying bank liquidity problems wither in excess or shortage which constitutes operational and management problem.
2. Identifying the overall impact of these problems on loans and advances to customers of the commercial banks.
3. Identifying the nature and extent by which commercial banks liquidity problems responds to monetary aggregates.

 

1.4     RESEARCH QUESTION

Some questions which this research intends to address includes:-

1. How does excess and shortage liquidity affects commercial banks/customers relationship?
2. How effective and efficient are central bank policies?
3. Does excess and shortage liquidity problems in the banking system affects commercial banks profit?
4. What are the overall impact of those problems on loans and advances to customers of the commercial banks?
5. Does the nature and extent by which commercial banks liquidity problems reports to monetary aggregates negative or positive?
6. Does bank liquidity problems either excess or shortage constitute operational and management problems?
7. The response of bank liquidity to monetary aggregates were analyzed using ordinary least square (OLS) regression and analysis of variance (ANOVA).

 

• HYPOTHESIS

HO: Commercial banks liquidity responses to monetary aggregates is not positive.

 

1.6         SIGNIFICANCE OF THE STUDY

Following the downturn in the economies future of this country over the years, commercial banks behaviours is difficult to predict and their loan to deposit ratio appears to show a gross inefficiency and lack of depositors protection this study is therefore, intended to provide these banks without sound banking policies which will protect depositors fund and ensure viability and efficiency.

 

The study also intended to ensure adequate managerial economic growth and development which will be encouraged as a result of improving banking operations and management.

 

Therefore, the research intended to have an empirical base either to correct all the sources about the poor impression people have of the banks liquidity and to advice banks on how to improve their services by ensuring that liquidity problems does not affect loans and advances made to their customers.

 

1.7         SCOPE AND LIMITATION OF THE STUDY

The scope of this study is wide if it has to be carried out in all commercial banks in Nigeria. The study is limited, based on the fact that there is no time and material resources to see to the whole nation. This study is limited to few commercial banks here in Enugu and the findings may not reflect the situation in the whole country. These findings may not be valid for the whole commercial banks in Nigeria, but by and large, what happens in commercial banks here in Enugu can be said to apply to other banks.

 

Estimate of Time and Time constraints. The researcher has estimated the time it will take to complete the study in the following ways:-

It would take the researcher about 2 weeks to complete the preliminary stage of the study such as working out plan of the study and developing researchable problems and hypothesis with clearly defined concepts and operations.

 

 

 

1.8         BACKGROUND OF THE FIRM STUDIES

Availability of research materials.

The researcher encountered some problems in getting the material necessary for the study. A lot of the researcher’s time and money was used up in buying Journals of the firm and test books dealing on the subject. And equally on visiting many libraries within Enugu and outside Enugu.

 

Corporation from the management and workers of both banks (first bank and union bank plc).

 

The researcher found it very difficult to get permission and co-operation from the management and workers of the firms who though that the researcher was trying to carry out an industrial espionage on the company or expose the internal operations of the firm to other firms or her competitors, it took researcher some reasonable time to convince the management that the study was strictly an academic exercise.

 

1.9         DEFINITION OF TERMS.

The following terms used in this study should be taken to mean the following:-

FOREIGN EXCHANGE MARKET (FEM)

The foreign exchange market is an arrangement which exists to assist buyers and sellers of foreign exchange to enter into contract of buying and selling.

 

LIQUIDITY RATIO

This is the percentage of bank deposits that the banks should hold in the form of cash or eligible liquid assets in the tills of the bank.

 

 

MORAL SUASION

It is a democratic instrument of monetary control. It involves the use of persuasion and appeal by the central bank to the commercial banks to comply with the central bank guidelines.

 

OPEN MARKET OPERATIONS (OMO)

This method involves the sale and purchase of securities, bills, bonds, and government securities by the central bank.

 

ORDINARILY LEAST SQUARE (OLS)

This is instrument used by central bank to analyse response of banks liquidity to monetary aggregates.

 

ANALYSIS OF VARIANCE (ANOVA)

It is also instrument used by bank to analyses response of banks liquidity to monetary aggregates.

 

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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.

WE HAVE SECURITY IN OUR BUSINESS.   

MONEY BACK GUARANTEE

Commercial Bank Lending And Loan Recovery Strategies

PROPOSAL

This research work will focus on the possible reason for bank failures. In this regard of loan lending and loan recovery and effects of such on the rest of populace plus how the financial industry could be transformed to meet the increasing challenge of the present day and finally, assessing the role of the Central Bank of Nigeria in ensuring safety of banks loan.

This research project will include the following literature review, guide for commercial bank services provided commercial banks, current policies, general guidelines for senior credit initials and account officer, credit approval, procedures, credit facility administration, causes of problem loans, collateral security, recovering of debts procedures, bad and doubtful debts, the prudential guidelines and its implication for bank lending, the effect of government policies at its effect, the growth of banking industry in Nigeria.

In order to solve the research problem, the primary and secondary data ha to be used. In the collection of data which are questionnaires and personal recommendation. These involves those in the banking field and those in the financial institutions.

While organizing or presenting the data collected the various hypothesis will be tested using chi-square, data analysis, evaluation and interpretation will bring about the summary, conclusion and recommendation.

 

CHAPTER ONE

• BACKGROUND OF THE STUDY

Many enterprises is established with the assumption that the objectives of every management is to maximize profit. The importance of these organization cannot be over emphasized as they are the bed rock of other sector of the economy. A very good example of the sector is the financial institution known as the banking sector. The phenomenal growth of banks following the introduction of SAP creates a take impression that the banking sectors is an all corners business. The financial industry was thus flocked by incompetent hand and operators with not too clear records and credential which culminate in and aggregated the distress situation.

The banking and financial industry is unique in that it depends mostly on the public confidence and once the confidence is eroded in some banks, it may spread to other banks and institutions and this could be very dangerous to the whole system and the economy at large. Capital adequacy is a parameter of solvency at banks and basis of public confidence in the sector. It should be also be noted as (Orji 1998) stressed that bank lending simply means credit creation and that implies that the profit maximization of the banks is mainly realised through credit creation, the  bank authorities should abide by the rules and regulation of eh Apex Bank (CBN) ie lending to the worst unit sector of the economy and on a reliable collaterals. The effort of the monetary authorities in Nigeria is commendable. In this respect as in the financial industry margins and acquisition is a possible solution for some category of banks in which assets are restricted and consolidated as this helps to enhance the quality of banks.

This research work will focus on the possible reasons for bank failures. In this regard  of loan lending and loan recovery and effect of such on the rest of the populace plus how the financial industry could be transformed to meet the increasing challenges of the present day and finally assessing the role of the central Bank of Nigeria in ensuring safety of banks loan.

 

• STATEMENT OF PROBLEMS

There are number of signal that we often tend to either overlook or discount as in consequential.  This signals later term out to be the beginning of a co-operate failure. The earlier we pick up these signs, the more we are able to recover from the customers. Simple put it is all about being provocative. The early warning signs are legion and the list, presented have under is not an exclusive one.

However, the characteristic are the same but more advanced with loss foreseen. That is a high probability of loss but the extent of which cannot be determined at this time. Full repayment of both interest and principal is improbable. A prudent credit officer will be best advised to quit and reduces his loss.

Other characteristics associated with doubtful classification include; past due obligations/defaults. Auditors disclaimer of opinion or qualification as to continued viability; serious collateral coverage short fall to earlier payment, full recovering dependent upon include events and ineffective of borrowers or creditors remedial efforts.

 

• OBJECTIVE OF THE STUDY

The issue of banks lending and its recovery strategies has posed as a challenge to the financial sector in particular and the whole economy in general and as such the project work is carried out to meet the following aims and objectives:

1. To know if the increased administrative expenses can be eliminated by good lending policies.
2. To find out if default borrowers can be reprimanded by serving a demand notice.
3. To ascertain how secured the collateral securities of these loans are.
4. To find out the extent of difficulties in the repayment of loan advances.
5. To establish the factors responsible for loan repayment in Nigeria.

 

• RESEARCH QUESTION

Based on this aims and objectives of the project work, the following questions stands and needs to be answered at the end of the work.

1. Is the increased administrative expenses eliminated through good lending policies?
2. Can the default borrowers be reprimanded by serving a demand notice?
3. Is the collateral securities of these loan advances secured enough to recover the loan advances to customers?
4. Has there been any loan repayment defaulters in your bank in recent times?
5. What is usually responsible for the these loan repayment default in recent times?

 

• STATEMENT OF HYPOTHESIS

In the cause of this work, the author will embark on the test of the following hypothesis and those findings will help in reaching a final conclusion and answer to the above research questions.

Hypothesis 1

Ho: The increased administrative expenses can not be eliminated by a good policies.

Hi: the increased administrative expenses will be eliminated through a good lending policies.

 

Hypothesis 2

Ho: the default borrowers cannot be reprimanded by serving a demand notice

Hi: the default borrowers can be reprimanded by serving a demand notice.

 

Hypothesis 3

Ho: the collateral securities of these loans are not secured enough to recover those loans advances and at when due.

Hi: the collateral securities of these loans are secured enough to recover those loans advances and at when due.

 

Hypothesis 4

Ho: there has not been any loan defaulter in our bank in recent times.

Hi: there has been some loan defaulters in our bank in recent times.

 

• SIGNIFICANCE OF THE STUDY

The research study will bring to light the observed reasons for commercial banks credit recovery failure and the effect of such on the institution, this will help banks to make amendment where necessary and help them. Increase there creation abilities and recover them at the fullness of time.

 

• SCOPE AND LIMITATIONS

This research work focuses on the commercial bank lending and loan recovery strategies due to problems associated in the regards in the sector.

The study will reflect briefly on the history of banking business in Nigeria, the development over the policies on operations and mode of xx.

However due to limitation the work now focuses on the citizens International bank. Currently there has not been enough work now focused on the citizens international bank. Currently there has not been enough work on the loan recovery strategy in the industry. It is expected that the more will be affected by those factors.

This financial constraints has adversely affected this study. Also proximity to published books on the said project topic was a difficult task to overcome.

Moreso, the data obtained is with the scope of the domestic banking as financial system, the issue of time constrain the project works.

Since this work needed extensive research to come out a very constructive project and while it was done simultaneously with other class work it has not easy to allocate enough time to this study.

The work through very interesting was constrained by certain factors. It would have been wonderful if author was opportune to have all the resources needed at his disposal, but this was not possible due to time factors and financial constraint on the other hand the financial problem coupled with general like in fares as occasioned by the fuel crisis that prevailed over the period of the study automatically limited my visitation to places where I would have sourced information.

 

• DEFINITION OF TERMS

The following are some technical terms used in the project.

1. CREDIT POLICY: This is how a firm plans to give its credit collection of debts owned to it by it customers.
2. LOAN PORTFOLIO: A mixture of shares and bonds held by a firms.
3. CAPITAL: It is the money by which one start off a business with. In a more technical terms, it could be referred to as the resultant between total assets and the habitation of a firm.
4. MANAGEMENT: The dismantling of regulation by central banks around the world. This has been another features of xxx internationalization.
5. CAMEL: Capital adequacy, asset quality management competence, barning strengths and inquisity sufficiency.
6. NIGER EUGENE: (1999) defines manager as “the fusing together to two or more companies to form a company whether fusion it voluntary of forced.
7. SAP: Structural adjustment programme
8. APEX BANK: This is the regulatory authorities of banking in Nigeria and if otherwise known as central bank of Nigeria.

 

 

References

Orjih, J, (2001) Financial Management (220) credit creation plasmedia organization.

Eugene F.B. (1999) pg 860 fundamental of financial mangement 5^th edition, USA dryden press New York.

 

Kanu, O. (2000) “why we curd tensing” this day daily Newspaper vol. 5 No. 80.

Download our android mobile app for more materials

ORDER NOW

COMPLETE MATERIAL  COST  N2,500 Or $10.  FRESH  PROJECT MATERIAL  COST 50,000 NAIRA FOR UNDERGRADUATE, OTHERS 100,000 -200,000 NAIRA.

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.

WE HAVE SECURITY IN OUR BUSINESS.   

MONEY BACK GUARANTEE

CHECKING DISTRESS IN THE NIGERIAN BANKING SECTOR THE ROLE OF ACCOUNTANTS AND AUDITORS

(A CASE STUDY OF FIRST BANK OF NIGERIA PLC, AWKA) 

PROPOSAL

 

          The objective of this research work is to check the distress in the banking sectors, the duty of the accountants and auditors to make sure that it does not occur.

The method of research used is both primary and secondary that is, the primary method will be in-form of interviews and administration of questionnaires while secondary will be using literature etc.

The limitation to be faced while carrying out this project is lack of money, time and data constrain.

At the end of the research I believed that there will be a way to solve this issue of distress in the banking sectors

CHAPTER ONE

1.0     Background to the study

• Introduction
• Statement of problem
• Objectives of the study
• Significance of the study
• Scope of the study
• Limitation of the study
• Definition of term
• Statement of hypothesis

CHAPTER TWO

• Literature review

2.1     Introduction

• Distress in the Nigerian banking sector
• Emergence of distress banks in Nigeria
• Implication of distress for the economy
• Causes of bank distress in Nigeria
• Who is an auditor
• What is auditing
• The role of auditor in distress and failed banks
• The role of auditing/function of the external auditor
• The duties of the accounting/auditor
• Auditor liability in relation to distressed and failed bank
• Letter to the management

 

CHAPTER THREE

• Research methodology

3.1     Area of study

• Research design
• Source of data and information
• Mode of data collection analysis
• Analysis of data

 

CHAPTER FIVE

• Presentation, analysis and interpretation of data

4.1     Data presentation

• Questionnaires administration and analysis of responses
• Test of hypothesis

CHAPTER FIVE

• Summary, conclusion and recommendation

5.1     Summary

• Conclusion
• Recommendations

Bibliography

Appendix

CHAPTER ONE

 

BACKGROUND TO THE STUDY

• INTRODUCTION

Distress in the Nigerian banking sectors is a problem that bank has in this recent time.  This seems as if the regulatory authorities appeared to be fighting a losing battle to sanitize the system.

Ebtiodaghe (1996) observed that banking distress occurs when customers were unable the loss of their deposits and consequent breakdown of their contractual obligation. The central bank fails to meet its capitalization requirements, has a weak deposit base and is afflicted by mismanagement.  Aderiu (1997) said that distress in banks I based on the banks examination rating system with the word “CAMEL” that is C=capital adequate, A = Asset quality, Management competence, E = earning strength, L = Liquidity sufficiency.  The above mentioned is the aggregate areas that really qualifies a bank to be branded “ healthy or sick”.

A bank is considered healthy by the CBN if it maintains six criteria for instance capital paid up capital, sound management i.e bank meeting up with CBN rules, satisfy customers and shareholders interest, minimum liquidity of 30% not less than 10% of its liquid assets to be in treasury bill and certificates.  In a situation where a bank defaults in one or few of the above criteria and fails to rectify its default position within a month, it is indeed qualified to be classified as distressed.

Where banks is unable to service its fixed costs, meet it debts obligations to its stakeholders has a net cash greater than its capital and can no longer operate profitably, the bank is deemed to have failed. Thus a failed banks is a bank which is unable to meet its obligations to its stakeholders as at when due arising from weakness in its financial, operational and managerial conditions.

The failed bank decree also defined “failed bank” as a bank whose license has been taken over by the CBN.  Due to the inability of the regulatory authorities to bring back some of these distressed bank which failed eventually,  the only way left in order to sustain public confidence and stability of the system is to revoke their licensed put them on  liquidation.

Regrettably this has been the fate of some distressed banks in the country.  Almost 36 banks are on distress.

This study will also highlight in chapter 2, the main internal  causes of distress and its implication on the Nigeria economy.

 

• STATEMENT OF PROBLEM

There have been accusations in newspaper journals and publications that the causes of the widespread distress in Nigerian banks is lack of objectivity and negligence on the part of accountants / auditors. They have been accused of not playing an effective role in these banks and hence have not adequately protected the integrity of these institutions as well as the interest of the owners.

The  above situation has given rise to the following problems

1. What role did the accountant/auditors play in the entire distress in banks?
2. Did the accountants auditors enter into secret agreement with the directors and management in the entire process?
3. Do auditors have any blame whatsoever, where they careless, negligent or incompetent?
4. Were qualified, tested and proven accountants/ auditors appointed?
5. Where the provisions of the how in – CAMD and sop on observed in the choosing and appointment? Of accountants/auditors of the affected banks?
6. Did the accountants, auditors discover the true states of the banks that they were in a dangerous position?
7. Did the accountants/auditors report their findings to the members and directors / management
8. Where the accountants/auditors right in reporting their findings to the management? What if they do so?
9. Did the auditors issue unqualified true and fair view report in each case of the failed bank prior to their failure or were cases when the auditors issued qualified reports warning over the state of these banks?
10. Were the auditors truly independent in the real sense of it or were there factors real and ability to report factually?

These are problems that arise and questions that demand answers.  However this project is not in a position to seek answers to all the questions it become necessary to define the objectives around the questions which can be answered within the constraints.

• OBJECTIVES OF THE STUDY

Against the background of the foregoing discussion, it becomes necessary to find answers to some of the more pressing research questions.  In line with this the research will pursue the following objectives.

1. To what extent was the distress in the banking sectors attributable to the negligence, incompetence, lack of independence and other act or omissions of the auditor?
2. Were the auditors equipped by training, calling and experience to discover the real present health of the banks, and did they do so?
3. Was it ethical or right for the auditors to have reported the true state of affairs to the bank management while issuing an unqualified opinion to the members?

 

• SIGNIFICANCE OF STUDY

Every research work aims among others to make contributions to various areas of practical and academic enhancement.  This one is not different.  It is expected that the body  of literature and material are gathered in order to define the role of auditors in the distress case.  By gathering them together they form a body that may be referred to by others researchers.  In this way it is way it is hoped, the work will make a significant contribution to theory and knowledge.

Further, the role of auditors will be brought into more critical focus thereby enabling accountants as well as users of accounting report to be more accurately aware of their duties and expected respectively.

 

• SCOPE OF STUDY

This study will focus attention on the distress in Nigeria banks.   The work bank or phrase banking industry does not include development banks of the new financial intermediaries such as community banks, peoples bank, primary mortgage institution and finance commercial and merchant banks with particular reference to those that have gone into liquidation.

This research will also dwell on the role of accountants/auditors in checking the present distress and a failure in the Nigeria banks.  Accountants/auditors in this sense will include only external auditors.   It will examine critically their  duties  as it relate to their client banks.

However the remedies and solutions to this distress will also be discussed.

• LIMITATION OF STUDY

With the canceling by the law of 36 distressed banks licenses and the consequent take over by Nigerian Deposit Insurance corporation (NDIC) for the purpose of liquidation, It became near impossible to obtain any kind of information form the affected banks most  because they are on liquidation.  NDIC was unwilling to disclose some information which they termed “classified” while the staff of the affected bank were denied access to the records.  This development constituted a very big obstacle and posed a limitation to this research.

 

• DEFINITION OF TERMS

FAILED BANK

          A failed bank is a bank that is unable to meet its obligations to its stakeholders as at when due arising from weakness in its financial operational and managerial conditions which could have rendered it either not liquid.

 

 

 

LIQUIDATION

Liquidation means to wind up a commercial firm (e.g bank) to become bankrupt.

CAPITAL ADEQUACY

          Capital adequacy is the level of capital necessary for bank as  determined by the supervisory and regulatory authorities to assume the banks financial health and soundness

 

FINANCIAL INTERMEDIATION

Financial intermediation is the traditional business of banks whereby bank mobilize funds from surplus spending units and allocate such funds to the deficit units.

NON-PERFORMANCE LOANS AND ADVANCE

Non – performing loans and advance are those loans and advance which have remained unserviced for up to 90 days and above. Loans and advance not serviced for 90 days are classified as substandard, 180 days as bad and 365 days as lost.

 

CAPITAL EMPLOYED:

Proprietors or store holders interest plus long term loans and debentures.

 

FRAUD

Dishonest behavior for the purpose of gain which may be punishable by law.

 

AUDITING

Auditing is the independent examination of financial statements of an organization for the purpose of being able to form an opinion as a basis for making an objective report.

 

1.8.   STATEMENT OF HYPOTHESIS

For the purpose of this study, the following hypothesis are formulated;

 

HYPOTHESIS 1

Null HYPOTHESIS [H0] :- To what extent was the distress in the banking sector attributable by the negligence, incompetence, lack of independence or other acts of omissions of the auditor.

 

Alternative Hypothesis [H1]:- Distress in the banking  sector did not attribute by the negligence, incompetence, lack of independence or other acts of omission of the auditor.

 

HYPOTHESIS 2

NULL HYPOTHESIS [H0]:- Where the auditor equipped by training, calling and experience to the discover the real present health of the banks, and did they do so ?.

 

Alternative Hypothesis [H1] :- Auditors did not eauipped by training, calling and experience to discover the real present health of the banks.

 

Hypothesis  3

Null Hypothesis [H0] :- was it ethical or right for the auditor to have reported the true state or affairs to the bank management while issuing an unqualified opinion to the member ?.

 

Alternative Hypothesis [H1] :- It was not ethical for the auditor to have reported the true state or affaires to the bank management while issuing an unqualified opinion to members.

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Foreign Transaction For Dollars Payment :
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Swift Code: GTBINGLA 
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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. 

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CAUSES OF DISTRESS BANK IN NIGERIA (A STUDY OF SAVANNAH BANK OF NIGERIA PLC)

CHAPTER ONE

• INTRODUCTION

1.1   STATEMENT OF PROBLEM

• PURPOSE OF THE STUDY
• SIGNIFICANCE OF THE STUDY
• STATEMENT OF HYPOTHESIS
• SCOPE OF THE STUDY
• LIMITATIONS OF THE STUDY
• DEFINITION OF TERMS

REFERENCE

 

CHAPTER TWO

• LITERATURE REVIEW

2.1   THE ROLE OF BANS IN AN ECONOMIC SYSTEM

• CAUSES OF DISTRESS BANKS
• TECHNIQUES FOR IDENTIFYING DISTRESSED BANKS
• BRIEF HISTORY AND BUSINESS OF SAVANNAH BANK OF NIG. PLC.
• RATIONALE FOR THE ESTABLISHMENT OF NDIC
• ROLE AND BENEFITS OF NDIC TO NIGERIA
• EXPECTED ROLE OF NDIC TOT HE BANKING SYSTEM
• OPERATIONAL ISSUES
• MERCHANT BANKS’ CONCERN
• INTERNATIONAL DEVELOPMENT ON CONVERGE
• EXCLUSION OF GOVERNMENT STOCK TREASURY BILLS AND CERTIFICATES
• NDIC AND BANK DIRECTORS
• THE ROLE OF FAILED BANK TRIBUNAL AND DISTRESSED BANKS

REFERENCE

 

CHAPTER THREE

3.0   RESEARCH DESIGN AND METHODOLOGY

3.1   SOURCES OF DATA

PRIMARY DATA

SECONDARY DATA

3.2   SAMPLE USED

3.3   METHOD OF INVESTIGATION

REFERENCE

 

 

 

CHAPTER FOUR

• DATA PRESENTATION AND ANALYSIS

4.1   DATA ANALYSIS AND INTERPRETATION

4.2   TEST OF HYPOTHESIS

REFERENCE

 

CHAPTER FIVE

5.0   SUMMARY OF FINDINGS

5.1   CONCLUSION

5.2   RECOMMENDATIONS

5.3   BIBLIOGRAPHY

APPENDIX

 

 

 

 

 

 

CHAPTER ONE

 

1.0           INTRODUCTION

BACKGROUND OF STUDY

A bank deposit insurance scheme is widely seen as a financial guarantee to depositors, particularly the small ones, in the event of bank failure. Bank deposit insurance scheme developed out of the need to protect depositors, especially the uniformed, from the risk of loss and to protect the banking system from instability occasioned by falls and loss of confidence.  The banking system has been singled out for this special protection because of the vital roles banks play in an economy especially in the process of economic development.

The Nigeria Deposit Insurance corporation is an agent of financial government of Nigeria established by decree No. 22 of 15^th June, 1988 to insure the deposit liabilities of licensed banks and other deposit – taking financial institutions operating in Nigeria.  The authorized capital of the corporation is N100million  out of which N50million has been already called and paid up.  The scheme protect depositors of failed banks either by paying off depositor or arranging for their deposit to be assumed by another bank which is viable.  In a deposit pay-off, the decree specifies that NDIC shall make direct payment to a depositor up to a maximum amount of N50,000,000.

Deposit in excess of the amount may be met in part if these are sufficient funds after the bank is liquidated.

Nigeria Deposit Insurance Scheme maintain the fund system to which every licensed banks are required to pay 15/16 of one percent of the total accessible deposit liabilities standing in its books as at 31^st December of the preceding year.  The rate is designed to provide premium reserve fund to offset claims in the event of pay off or to support a failing bank.  For instance, any financial and technical support that may be required to safeguard the banking system are to be met out of the premium reserve fund.  A systematic failure of deposit taking institutions increases the level of distress in the financial system, results on disintermidiation, low saving and investments, poor execution of monetary policies and the disruption of the payment system.

Among the action usually taken by government to restore stability are the restructuring of the distressed institution, the improvement of the existing bank supervision and examination systems and the establishment of deposit insurance schemes.  In particular, the creation of explicit deposit insurance schemes are intended to help restore public confidence in the banking system, provide the government with a formal mechanism for dealing with failing institutions and assure that small depositors would be protected in the event of failure.

Generally, more explicit insurance schemes supervise the institutions they insured.  The off-sight surveillance of the scheme to develop early roaming signal against potential problems on insured institutions.  Also, through on-sight examination, the deposit insurer is able to monitor the soundness of insured institutions.  These supervisory activities in addition to various forms of assistance to  insured institutions, including deposit guarantee’s to depositors, engender depositor’s confidence in the financial system.  A high level of depositors is a necessary condition for bank stability, for without such confidence even unfounded rumours of an institution’s unsoundness would trigger deposit runs and precipitate instability in the financial system.

 

• STATEMENT OF PROBLEMS

The nation is today once again witnessing a proliferation of new banks in our system.  This together with the on-going deregulation of the banking system justifies the government decision to find alternative means of protecting the interest of depositors.  Thus, the introduction of Deposit Insurance Scheme was considered to provide a watershed between the old and the new stance of government as a veritable scheme that would serve as a vehicle to allow a change in policy.

 

By the end of 1991, for example, eight (8) banks in

Nigeria was officially classified as distressed.  By December, 1992 the number rose to fifteen (15) it was up to twenty-seven (27) as at December, 193, forty-seven (47) as at December, 1994.  “it” rose to fifty-seven (57) as at July, 1995. The was the more reason urgent attention, should be given to this canker-worn that has eaten deeply into the economic fabric of this great nation – Nigeria.

 

In the year 1988, Deposit insurance Scheme was

established banks.  The problems encountered by the scheme are:

1. Failure to understand the regulation and purpose of the scheme
2. Inadequacy of offices to handle and monitor banks within their zone.
3. Most bank directors regard certain information confidential

which is needed by the scheme to execute their supervisory function.

 

4. Merchant banks opted for exemption because the amount of coverage of N50,000.00 is exactly equal to their minimum deposit.

 

5. Some banks refused to channel their full participation with the argument that the scheme ought to have been voluntary since some banks especially the large ones are not likely to fail.
6. Some banks have argued that all deposits with licensed banks need not be insured, since a good proportion of the deposits in licensed bank is not exposed to risk.

 

However, among the questions to be answered in the research work, include:

 

1. What are the rational for establishing Bank Deposit Insurance Scheme in Nigeria?
2. What is the functional relevance of the Deposit Insurance Scheme to the banking system since its’ inception in Nigeria
3. Is there any relationship between NDIC and Commercial/Merchant Bank in crisis?
4. Is there any relationship between NDIC and the Central Bank of Nigeria?
5. Is the present ‘Dis’ adequate for the Nigeria financial system?
6. What are the achievements of NDIC since it’s inception?
7. What role did NDIC play in the operation of Savannah Bank of Nigeria?
8. What is the role of the government, the CBN and Ministry of finance in the operation of NDIC?
9. What is the role of the failed bank tribunal in distressed

 

• PURPOSE OF STUDY

The purpose of this research work is among other things to:

1. Examine the rational for establishing Bank Deposit Insurance Scheme in Nigeria.
2. To determine the functional relevance of Nigeria Deposit Insurance Scheme to the Banking system up to date

• To ascertain the relationship between NDIC and Commercial Merchant Bank in crisis.

1. To critically examine the differences and similarities of NDIC and Insurance Company
2. To unveil relationship between NDIC and the Central ank of Nigeria.
3. To ascertain the role of NDIC in the operation of Savannah Bank of Nigeria.

• To critically examine the role of Government, the Central bank of Nigeria and the Ministry of Finance in the operation of NDIC.
• To compare NDIC with U.S.A, FDIC

1. To critically examine the role of the failed bank tribunal in distress banks
2. To critically examine the adequacy of the present “Dis” for the financial system
3. To proffer suggestions to make the scheme more functional where necessary, in order to attain it’s stated objectives.

 

• STATEMENT OF HYPOTHESIS

(a).   Ho – There is no rational for establishing Bank Deposit Insurance Scheme in Nigeria.

Hi – There is rational for establishing Bank Deposit Insurance Scheme in Nigeria.

 

(b).   Ho – There is no functional relevance of the Deposit Insurance Scheme to the Bank system since it inception in Nigeria

Hi – There is functional relevance of the Deposit Insurance Scheme to the Banking system since its inception in Nigeria.

 

(c).   Ho – There is no relationship between NDIC and Commercial/Merchant Bank in crisis.

Hi – There is positive relationship between NDIC and Commercial/Merchant Banks in crisis.

(d).   Ho – There is no relationship between NDIC and the Central Bank of Nigeria.

Hi – There is positive relationship between NDIC and the Central Bank of Nigeria.

 

(e).   Ho – There is no positive relationship between NDIC and old Savannah Bank of Nigeria.

Hi – There is positive relationship between NDIC and old Savannah Bank of Nigeria.

 

(f).    Ho – The present “Dis” is not adequate for the financial system.

Hi – The present “Dis” is adequate for the financial system.

 

• SIGNIFICANCE OF STUDY

The study will attempt to identify the causes of distress

bank especially in old Savannah Bank of Nigeria as a selected case study.  The significance of the study as at this point in time cannot be over – emphasized.  The following will benefit immensely from the work.

1. Researchers
2. the bankers, financiers and the insurers
3. the government and regulatory authorities
4. students
5. the general public
6. RESEARCHERS

Other researchers in the field can make use of this work,

they can continue from where the work stopped bearing in mind that this is not a comprehensive research work.

 

 

1. BANKERS, FINANCERS AND THE INSURERS:

If the aforementioned go through this piece of work

thoroughly, they would be able to assess fully if NDIC is living up to expectation, they would be able to make useful suggestion towards correcting the issue.

 

1. GOVERNMENT AND REGULATORY AUTHORITIES:

The government of the Federal Republic of Nigeria

established NDIC in the year 1988. From this piece of research work, the government and her regulatory bodies would be able to ascertain the performance of NDIC since its inception.  In the course of doing this, they would be able to identify the area NDIC has covered fully and to reconcile the two by mapping out strategies to arrest the loopholes.

 

1. STUDENTS:

Students in higher institutions will surely benefit a lot

from this work. They will use this for academic work as well as research assignment.

 

1. GENERAL PUBLIC:

The general public are the consumers of financial services

prior tot he establishment of NDIC in Nigeria, depositors interest in the banking industry had reduced drastically .  this was as a result of their not being protected in time of bank crisis or failure. With the establishment of NDIC, depositors went back to the banks freely for their business.  In essence, after going through this work, the general public would be able to assess NDIC through its pros and cons.

 

• SCOPE AND LIMITATIONOF THE STUDY

This study is basically dealing on distress banks versus

NDIC. Indeed, since the researcher is a student, who combined this research work with other things including academic work, because of time factor, money constraints and communication barrier one has to limit the scope of this study to Lagos Zonal office of NDIC and Old Savannah Bank of Nigeria.  It is strongly believe that the result, finding ad recommendations made will be applied to other NDIC Zonal offices and other distress banks in Nigeria because the chosen office have got some features that represent typical NDIC and distress banks in Nigeria.

In the process of carrying out this research work, the researcher was faced with a good number of constraints and problems which contributed to the limitation of the entire research study.  The constraints and difficulties including the following:-

1. Time constraints
2. How literature rate
3. Shortage of finance
4. Secrecy and reluctance of respondents
5. Current issue
6. TIME CONTRAINTS:

The researcher consider time as one of the greatest

Problems because this study had to go along with normal lecture schedules, normal Semester exams, and normal social activities.  This retarded the researcher from devoting enough time to this study, hence the best is not achieved.

 

1. LOW LITERATURE RATE:

Much research work have not been done directly on the

area of this research study.  However, the writer could only rely heavily on the few available literatures, personal interview business journals use of seminar papers and issue of questionnaires.

 

1. SHORTAGE OF FINANCE:

Every Dick, Tom and Harry knows that finance is the

pivot on which every business retakes.  Business start with finance and ends with finance.  The researcher had problem of finance to visit NDIC office and Old Savannah Bank of Nigeria office regularly to cover much area and spread investigations hence the best result could be achieved.

 

1. SECRECY AND RELUCTANCE OF RESPONDENTS:

It was difficult for the NDIC officials and Old Savannah Bank of Nigeria officials to disclose some pieces of information which are vital to this study which they deemed as official secret.

 

 

 

 

 

1. CURRENT ISSUE:

Bank Deposit Insurance Scheme being a very current issue on which few banks and economists hence hardly passed little comments, presented another problem in terms of data collection.

 

• RESEARCH METHODOLOGY

The main source of data collection.  The research work is

primary source even though secondary sources helped in the research work.  Data was obtained from banks, NDIC, library research and oral interview.  Other materials used for this project include extracts from business firm, newspapers and textbooks, these consisted of my secondary sources of data collection.

Statistical methods such as percentages and tables were used for the data analysis, where they were applicable.

 

• DEFINITIONOF TERMS

1952. Banking statute or law relating to banks and the banking system made by an authority or decree. The first banking ordinance passed in Nigeria was 1952.
1953. BAS – Banking Analysis System
1954. BOFID – Banks and Other Finance Institution Decree
1955. CBN – Central Bank of Nigeria
1956. DECREE – An enactment or law passed by any military government.
1957. DEREGULATE – This terms means techniques used to stop further control or stop obeying a rule or standard
1958. DIS – Deposit Insurance Scheme
1959. DISTRESSED – Technical Insolvent
1960. DOMINO EFFECTS – Small flat effects
1961. W.S – early warning signals
1962. FDIC – Federal Deposit Insurance Corporation (USA) in a

position to obtain facts and information or win advantages that others cannot get for themselves.

1. NDIC – Nigeria deposit Insurance Corporation
2. RISK-FREE INVESTMENT – Investment free from instance of possibility or chance of meeting danger, suffering loss, injury etc. as used in the context, it means that investment in government securities could be regarded as the best investment that can be made by any investor.
3. A.B – Structural Adjustment Programme
4. S.B – Transitional Supervisory Board
5. OFF – SHORE BRANCHES OF BANKS – Branches Outside the Country of the bank’s domicile.

REFERENCES

 

1. Umoh, P.N. “The relevance and adequacy of the present deposit insurance in ensuring a healthy financial environment in Nigeria” being a paper presented by the fourth annual conference of zonal reassert units organized by the research department, Central Bank of Nigeria , held in Abuja, Nigeria on May, 23- 27 1995.

 

2. Mgbojikwe, E.N. “management imperatives of a Bank in Distress”, NDIC New vol. 2, No. 1 Jan./March, 1995.

 

3. Deposit Insurance, “The Experience in Nigeria” Seminar for Senior Bank supervisors organized by the world Bank/Federal Reserve Board Accra, China.

 

4. Ballama Manu, NDIC Quarterly, Nigeria Deposit Insurance Corporation vol. 4, No. 3, Sept. 1994.

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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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DEVELOPMENTAL IMPACT OF RURAL BANKING IN NIGERIA
(A CASE STUDY OF UNITED BANK FOR AFRICA (U.B.A) PLC)

 

 

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

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ABSTRACT

This research work is aimed at bringing into light the Development impact of rural banking in Nigeria’s rural area and how it affects the economy in general. For the purpose of orderly presentation of relevant materials, the main body of this work has been divided into five chapters
The first chapter which is the introduction consider among other things problems identification/statement of problems, Rational of the study, Significance of the Study, Background of the Study and Definitions of the Terms used.
Chapter two (2) focuses on the literature review, Theoretical Review and Empirical Review which discusses on banking marketing awareness and acceptance, the social responsibilities facing banks, rural banking and agricultural development, rural banking scheme and evaluation of the rural banking scheme among others.
The third chapter deals with hypothesis of the study, research methodology, sources of data and limitation of the study.
The fourth chapter shows data presentation, analysis of data and discussion of the results.
The fifth and final chapter focuses on the summary, conclusion and recommendation.
TABLE OF CONTENTS

Title Page ii
Approval Page iii
Dedication iv
Acknowledgement v
Abstract vi
Table of Contents vii
CHAPTER ONE
1.0 Introduction 1
1.1 Statement of the Problem 1
1.2 Rational of the Study 2
1.3 Significance of the Study 3
1.4 Background of the Study 4
1.5 Definitions of the Terms Used 8
CHAPTER TWO
2.0 Literature Review 13
2.1 Theoretical Review 13
2.1.1 Banking Marketing Awareness and Acceptance 16
2.1.2 The Social Responsibilities Facing Banks 17
2.1.3 Rural Banking and Agricultural Development 21
2.1.4 Rural Banking and Rural Infrastructural Development 22
2.1.5 Rural Banking and other Development 24
2.2 Empirical Review 25
2.2.1 The Rural Banking Scheme 25
2.2.2 Evaluation of the Rural Banking Scheme 34
2.2.3 Measures for Improving Banking Habit in Nigeria 39
CHAPTER THREE
3.1 Hypothesis of the Study 42
3.2 Research Methodology 43
3.3 Sources of Data 45
3.4 Limitation of the Study 45
CHAPTER FOUR
4.1 Data Presentation 46
4.2 Analysis of Data 49
4.3 Discussion of Results 55
CHAPTER FIVE
5.1 Summary 57
5.2 Conclusion 60
5.3 Recommendations 62
Bibliography 66
CHAPTER ONE

INTRODUCTION
1.1 PROBLEMS IDENTIFICATION/STATEMENT OF THE PROBLEM
According to Osuntogun and Adewuimi (1983).
The commercial bank is a profit making organization and as such there is geat fear by operators of commercial banks in establishing in the rural areas, this is because like every profit making organization they would not want to lose their business. But it has been that rural banking is in dispensable if the Nation is to develop its rural area will development of one’s rural area may not be realized it the serious of commercial banks are not at the reach of our rural dwellers.
This project work is designed to measure what extent the rural commercial bank have been able to involve the rural dwellers in economic activities in terms of awareness and the influence on their style of living through banking activities and how successful the banks are measuring up with their major aim of existence.
This research work is aimed at bringing into light the development impact of rural banking in Nigeria rural areas and how it affect the economy in general.
It is also aimed at investigating the impact of the rural banking services.

1.2 RATIONAL OF THE STUDY
The reason for the study is aimed at finding out the development impact rural banking in Nigeria has on rural areas/rural dweller.
The study is important now because rural banking in Nigeria increases the productivity of small and medium agricultural farmers and the entire economic activities of the rural areas.