FINANCIAL REPORTING IN NIGERIA, PROBLEM AND SOLUTION

 

 

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ABSTRACT

The unprecedented master influx of financial reporting in the country party as a result of deregulation policies occasioned by sometimes government intervention has aroused the curiosity of writers to carry out study of this nature. This reporting apparently act as a fool for management decision. The problem does not lie on management decision per se but the financial market in general and public users as a whole.
Thus the cord of this study is to find among other things need, avenue to get financial report, the likely, problem and their root cause eventual findings and analyses of research work, recommendations and possible solutions as regard to proper financial reporting in Nigeria
The study follows the chronological order of first introducing the study, coupled with its evolution, objective, significance and likely problems to resolve elaborating on the scope of study and definitions of some teams used in the study.
In the literature review of the study, the researchers try to extract the salient quality of the study.
In carrying out the research, the researcher made used of personal interview, observation and collection of related literature in obtaining their information.
Furthermore, analyses their finding, citing problems, their root cause, and the users of the financial reporting the regulatory bodies.
Finally, in recognition of the obvious of the fact, the reveals as regard to the analyzed work recommendations were made and possible solutions suggested.

CHAPTER ONE
INTRUDUCTION … … … … 1
1.2 OBJECTIVE OF FINANCIAL REPORTING … 3
1.3 SIGNIFICANT OF FINANCIAL REPORTING … 5
1.4 STATEMENT OF PROBLEM … … 6
1.5 SCOPE AND LIMITATIONS OF THE STUDY … 8
1.6 DEFINITION OF TERMS … … 8

CHAPTER TWO
0: LITERATURE REVIEW … … … 12
:1 QUALITIES OF FINANCIAL REPORTING … 12
2:2 RELEVANCE … … … 13
2:3 RELIABILITY … … … 14
2:4 MATERIALITY … … … 14
2:5 COST AND BENEFITS … …. … 16
2:6 REFERENCES … … … 17

CHAPTER THREE
3:0 RESEARCH DESIGN AND METHODOLOGY … 18
3:1 POPULATION … … … 18
3:2 INSTRUMENTS OF DATA COLLECTION … 20
3:3 RELIABILITY OF INSTRUMENTS USED … 21
3:4 METHOD OF ANALYSIS … … …

CHAPTER FOUR
4:0 ANALYSIS OF FINDINGS … … … 23
4:1 PROBLEM OF FINANCIAL REPORTING … … 23
4:2 RELEVANCE AND USEFULLNESS … 24
4:3 RELIABILITY, … … … 27
4:4 COMPARABILITY AND CONSISTENCY … … 29
4:5 EXTERNAL ENVIROMENT REGULATION … … 31
4:6 REPORTING DTANDARDS … … … 33
4:7 COMPETITION … … … 35
4:8 USEDS OF FINANCIAL REPORTING … … 37
4:9 AUDITORS … … … 39
4:10 REFERENCES … … … 40

CHAPTER FIVE
5:0 RECOMMENDATION AND SOLUTIONS … … 42
5:1 REGULATOR … … … 42
5:2 REPORTING STARNDARDS … … … 43
5:3 USERS OF FINANCIAL REPORTS … … 44
5:4 PEPOLE AND MANAGEMENT … … 44
5:5 AUDITORS … … … 45
5:6 REFERENCE BIBILOGRAPHY … … 47

CHAPTER ONE
1:1 INTRODUCTION
Financial reporting is principally concerned with the communication of financial Information relating directly or indirectly or indirectly to an enterprises resource, Obligations, earnings e.t.c.
The principal reporting medium is normally financial statement financial statements are important measure of communicating for useful purpose. The usage of scare economic resources by an enterprise. As such, they need to contain all relevant information to be realized, and be reality understood by the well-informed reader.
When different accounting treatment and disclosures are used for essentially the same transaction or when information is omitted, the chances of the information provided in the financial statements being misleading or maunders are insured. Although there may sometimes be good reasons for differences in accounting standards, principles, applications or disclosures that evolved at national level or otherwise over turn now with the introduction of MIDF and the level of public interest developing in financial reporting may be a good tome to look at our local reporting form an over all perspective.
These issues of validity and credibility from the care of my of my topic “financial Reporting in Nigeria: problems and solution.” The objectives of my speech is to identify and define the problems in financial reporting in Nigeria at present and thereafter to offer or suggest solutions or recommendations. Thereon.
In this regard, a brief over view of the evolution of financial reporting. Its objectives and the over all challenges facing if will be conducted.

OBJECTIVE OF THE STUDY
The need for information on which to base investment credit and similar decision underlies the objective of financial reporting. If information provided is not useful for decision making, there would be no benefits form providing it to set against related costs.
The objectives issued by the U.S financial Accounting standard board (FASB) on financial reporting are as follows:
1. Financial reporting should provide information that is useful to present and potential investors and creditors and other users in making national investment, credit and similar decisions.
2. The information should be Comprehensive to those who have a reasonable understanding of business and economic events.
3. Financial reporting should proved information to help present and potential investors and creditors and the other users in assessing the account, firming and ascertaining of prospective cash receipts from cash out flows of a business ability to generate sufficient cash to meet existing obligations as and when due, reinvest in the business for further growth and pay dividends to shareholders.

4. To assist existing and potential investors in assessing.

5. To provide information about economic resource of an enterprise claims to those resources and the effect of transactions or economic events.

6. To provide information about how enterprises obtain an utilizes cash resources about its borrowing and repayment of borrowing.

7. Financial reporting should provide information about how management has to use the resources of the enterprise entrusted to it by owners of the business.

8. Finally, financial reporting should provide information that is useful to management in making decision in the interest of the business.
This seems fairly comprehensive definition to the objective of financial reporting. It of course leads us to the question of whether Nigeria financial reporting meets such objectives.
1:3 SIGNIFICANT OF THE STUDY
The whole essence of financial report as noted is to serve as a tool in decision

LOAN SYNDICATION AS AN ALTERNATIVE TO BUSINESS FINANCE IN NIGERIA

 

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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. 

Note:  We accept bank transfer, ATM cash transfer , Online payment using your ATM , Western union bank transfer.  We will respond to you anytime of the day. 

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

CALL 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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ABSTRACT

Lack of fund has been one of the major problems militating against the progress and growth of our business organizations. This is caused by a lot of factors such as low savings (Vicacious Circle of Poverty), Ignorance of the Public to invest, mismanagement etc. There are many ways of solving the problems of Finance and Providing adequate finance to our business organizatios such as equity stock, savings, ploughing back profits, but for the purpose of this research, we have to pay attention to loan and loan syndication.
TABLE OF CONTENTS
CHAPTER ONE:
1.0 Introduction
1.1 The Purpose of the study
1.2 Significant of the study
1.3 Scope of the study
1.4 Limitations of the study
References
CHAPTER TWO:
2.1 Definition of Syndicated Loan
2.2 Forms of Syndicated credit finance
2.3 Procedures for Syndicating a loan
2.4 Methods of Syndicating loan
2.5 Advantages of Syndicated loan as financing alternative
References
CHAPTER THREE:
3.1 Sample Size
3.2 Sources of Data
3.2.1 Secondary Sources
3.3 Location of Data
3.4 Method of analysis
References
CHAPTER FOUR:
4.1 Summary of Findings
References
CHAPTER FIVE:
5.1 Recommendation
5.2 Conclusion

CHAPTER ONE
1.0 INTRODUCTION:
The relative insufficiency of funds for capital investment is a common factor in every economy especially in developing countries like Nigeria. In every developing country, the low level of capital investment manifest in high unemployment rates, low productivity and corresponding low standard of living for greater majority of the population.
Finding a solution to this problem of providing fund for capital investment has been a major Pre-occupation of financial institutions in Nigeria. Beyond the traditional term loan, share offers, bonds and so on, business organizations and financial institutions alike have sought out avenue to tackle the problem of insufficient fund for capital investment. One of the solutions they have come out with is syndicated fund or multiple credit facilities, which is aimed at spreading risks and weakening the impact of respecting laws and regulations on lending by financial institutions.
Syndicate has been defined as an association of industrialists, or financials or banking consortium forced to carry out some industrial projects.
Accordingly, loan syndication is basically defined as an agreement between two or more leading financial institutions to provide a borrower with credit facility utilizing common loan documentation.
The spectacular growth of loan syndication as an alternative financial instrument for business organization occurred as a response to several economic factors in Nigeria.
Notable among these are:
– The National Industrial Policy of 1989 which is aimed at:-
* achieving accelerated pale of industrial growth in Nigerian economy.
* The introduction of structural adjustment programme in 1986, culminating in the establishment of Naira, this made imported machinery and equipment very expensive and requiring huge capital outlays which most companies or financial institutions cannot comfortably afford.
Also, the study of the extent to which business organizations in the country employ syndicated loan as an alternative financing means with particular reference to Anambra, Rivers and Enugu States respectively, has been carried out in this study.
1.1 THE PURPOSE OF THE STUDY:
The purpose of this study includes inter – alis;
* An examination in general terms

THE PROBLEM OF BANKING SYSTEMS IN NIGERIA.

 

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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. 

Note:  We accept bank transfer, ATM cash transfer , Online payment using your ATM , Western union bank transfer.  We will respond to you anytime of the day. 

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

CALL 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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CHAPTER ONE
1.1 Background of the study
1.2 Statement of the problem
1.3 Purpose /objective of the study
1.4 Significance of the study
1.5 Limitation of the study
1.6 Definition of terms.
CHAPTER TWO
Review of related literature
2.1 Definition of a bank
2.2 Types of banks and their functions.
2.3 The role of banks in the National Economy
2.4 Types of problem facing commercial banking industry in Nigerian.
CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY.
3.1 Source of data (Secondary data only)
3.2 Location of data
3.3 Method of data collection (literature work only)
CHAPTER FOUR
4.1 Findings
CHAPTER FIVE
5.1 Recommendation
5.2 Conclusion.
CHAPTER ONE
INTRODUCTION
1.2 BACKGROUND OF THE STUDY
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 transaction. Because these receipts were accepted generally, they became transferable too.
A bank is an institution where money and valuables are kept for safety purposes. Bank also lend money known as loan, pay out money on the customers order by means of a change and bank draft and also give over draft to customers.
The structure of banks can be grouped into the following namely.
CENTRAL BANK This is the apex financial institution which is charged with the responsibility of managing the cost, volume availability and direction of money and credit in an economy with a view to achieving some desired economic objectives.
This was established in March 1958 and started full operation by 1st July, 1959 which was after many banks like West African Currency Board (WACB) in 1912, and the international bank for Reconstruction and Development (IBRD) in 9155 failed to perform their objectives, and they later folded up.
COMMERCIAL BANK: They are financial which carry out the ordinary banking business of receiving deposits, advancing loan, discounting bill and offering related services to the general public. This started in Nigeria in 1892 with the establishment of African Banking Corporation and folded up in 1893. Then British Bank of West Africa (BBWA) was established in 1893, started operation in 1894 and later fold up too. Many other banks came into existence, which equally folded up. This is classified into main group, which are as follows.
INDIGENOUS BANK: These are banks fully owned and controlled by Nigerian citizen including government. The first Indigenous bank in Nigeria was the National Bank of Nigeria (NBN). Which started operation in 1933 followed by African Continental Bank LTD (ACB in 1947.
MIXED BANK: These are bank jointing owned and controlled by foreigners and Nigerian Citizens including government.
FOREIGN BANKS (EXPATRIATE BANK): These are bank fully owned and controlled by the foreigners.
The Nigerian indiginization Act of 1972 converted most of these foreign banks, which was later phased out long time.
However, the 1995 budget has reintroduced the foreign (expatriate) trade in which banking system is an integral part of it.
MERCHANT BANK: This is a bank that specialize in providing who engaged in whole sale banking, medium and long term financing, equipment leasing debt factoring, investment management, acceptance bills and management of unit trust. This was established in 1964.
DEVELOPMENT BANK: This is bank which specialize in providing long term fund for industrial, agricultural, commercial and mortgage development.
Also, it helps entrepreneurs by providing loans and consulting services to them. This is classified in the following groups namely.
NIGERIAN INDUSTRIAL DEVELOPMENT BANK (NIDB)
This was established in 1964 to replace the investment corporation of Nigeria. This assists the public and private sector companies.
NIGERIAN BANK FOR COMMERCE AND INDUSTRY (NBCI) This was established I 1973 to see to the financial implementation of the enterprises promotion decree of 1973. This assists the indigenous businessmen.
NIGERIAN AGRICULTURAL AND CO-OPERATIVE BANK (NACB) This assists the agricultural sectors individual farmer and co-operative bodies and is fully owned by the federal government.
This was established in 1973 with a capital of twelve million naira (N12 million).
FEDERAL MORTGAGE BANK (FMB) this is a bank established by the government to help people build house by giving them long-term loans. The customers pay back what they own the bank by mortgaging the land and house till they finish what they are owing.
SPECIALIZED BANK: This is another types of bank which was established by the government and it includes the following namely.
PEOPLES BANK OF NIGERIA: This is set up by the Nigerian government in 1989 to help petty traders. They also provide loans in-group at no interest rate but an administrative cost of fifteen percent (15%) of the loan.
COMMUNITY BANK: This is self-sustaining bank owned and managed by a community or a group of communities to provide financial services to that community. This was established in1990.
Banking system is the system at which banks operate. This is divided into four groups namely.
UNTIL BANKING: This is a types of banking system where the bank involved operate without branches. This is commonly found where commercial bank exists.
BRANCH BANKING: This system relate to a situation where there are few bank with a large number of branches. This then falling the readers that the bank seen here operate with branches.
GROUP BANKING: This system is a situation where three 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 and entrepreneurship development. The Nigeria banking system still encounters a lot of problem, which has disrupted its operation in the country.

1.2 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 traceable to indigenous banks.
Nigerians set up these banks as earlier mentioned with sole objective of meeting the business needs of follow Nigeria. For insurance the National bank, when established in1933, work towards catering for the interest of Nigerian. Which aimed at assisting indigen

THE EFFECT OF QUALITY SERVICE DELIVERY ON CUSTOMERS PATRONAGE IN FIRST BANK PLC, KADUNA

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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. 

Note:  We accept bank transfer, ATM cash transfer , Online payment using your ATM , Western union bank transfer.  We will respond to you anytime of the day. 

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

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

CALL 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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ABSTRACT

 

CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

The banking industry which is various bank put together to this industry consist of the central, commercial, merchant, development and saving banks. Central bank being the apex bank. Though banks are classified according to their functions, a detailed study of their various functions showed that they have common features and functions but with a slight and important distinction.

 

Just like other human activities, banking has a history which dates back to the 2500BC. The early known bankers have the jews in hombandy in Haley who transacted their business on benches in the market place.

 

The project examines customers services since the banking industry is with the aim of evaluating the level of satisfaction of customers in response to services offered. To do this effectively FBN PLC, Kaduna has been selected to serve as our case study.

 

Banking in Nigeria

The earliest recorded banking in Nigeria was by Elder Demister company and the African banking corporation in 1894. The banking activities of these corporations were later taken over in 1894 by the British West Africa. It remained as until 1971, when the colonial bank opened officers in Jos, Kano, Lagos and Port Harcourt

The bank of British west Africa later become standard bank of Nigeria ltd and now FBN PLC. The colonial bank was also renamed Barclays bank. Its name change against to union bank of Nigeria limited on 12th March 1979. The first indigenous bank was the industry and commercial bank, which was established in 1929. It collapsed in 1931 and went out of business in 1936. In 1933 the national bank of Nigeria was opened. The next important event was not until 1945, when the Agbonmag be was established. The African continental bank was formed in 1946 as the Tinubo bank and changed to its WEMA Bank Plc, Bank of the North was established in 1959, Cooperative Bank was established on 1962.

There was also the emergence of the United Bank for Africa in 1949. The last four banks mentioned above are still in existence.

The first banking ordinance appeared in 1951 and ruled that no bank would be allowed to operate without a license from the government. The ordinance established the central Bank of Nigeria which take over the issue of ensuring monetary stability and sound commercial banking operation in Nigeria.

In order to develop the rural area economically, the federal government in 1991 also ensured the concept of rural banking, also known as community banks. Community bank was found in practice of the Africa society, it was to this end that the then central bank governor, late Alhaji Abdulkadir pointed out that “community banks are bound to Nigeria today.

The British and French bank which was established in 1947, later its name was changed to United Bank of Africa in 1961.

 

The Economic Importance of Commercial Bank in Nigeria

The distinguishing feature of a commercial bank is that it hold itself out as prepared to accept deposit of money from members of the public on current or deposit account to honour cheques drawn by its customers on their accounts, and to its customers and drawn on or issued by other banks.

 

Commercial banks deals in money, receiving it on deposit from customers, honouring customers drawings against such deposits of demand, collecting cheques for customers and lending or investing surplus deposits unit they are required for repayment. From the above functions of commercial banks it becomes clear that they are of great use to the government, the business community and the various individual, in the society. The government requires the corporation in execution its monetary policies, such as the restriction of expansion of credit as and when the need arise. In developing countries like Nigeria, the central bank is a substantial lender in the short term trough a treasury bill purchases as a lender of last resort to customers demands.

 

1.2     STATEMENT OF THE PROBLEM

The survival of the banks depend on the number of customers, the banks are able to satisfy. The statement of problems are cost of bank service is high, interest rates on loans and deposit are high, time spent in transacting business in the bank is long and

CRISIS MANAGEMENT OF SOME DISTRESSED BANKS.

CHAPTER ONE

Introduction                                                                     1

1.1   Statement of problem and objective                         1.

1.2   Rational of study                                                     2.

1.3    Significant of the study                                           3.

1.4    Background of the study                                         4.

1.5   Definition of term                                                     5.

 

CHAPTER TWO

       Literature Review                                                             11

2.1     Theoretical Review                                                        11

2.2   Empirical   Review                                           15

 

CHAPTER THREE

Hypothesis Methodology, Sources Of

Data And Limitation Of Study                                          38.

3.1   Hypothesis of study                                         38

3.2   Methodology of study                                               39

3.3   Sources of data                                                         42

3.4   Limitation of the study                                             43

 

CHAPTER FOUR

Data Presentation, Analysis and Discussion Of The Result.    45

4.1   Presentation of Data                                                45

4.2   Analysis of data                                                       47

 

CHAPTER FIVE

Summary, Conclusion And Recommendation                 59

5.1   Summary of the entire work                                    65

5.2   Conclusions                                                     66

5.3   Recommendation                                                     68

Bibliography                                                            71

Appendix                                                                 73

 

 

 

CHAPTER ONE

INTRODUCTION

1.1     STATEMENT OF THE PROBLEM / OBJECTIVE OF STUDY

Banks is very important in the life of a nation according to Umoh (1994) the banking industry plays the role of the engine of growth for the economy, the view was supported by Bello (1993)

The Banks Faced a lot of Problem which made the customers to be fraud of the of their deposit and banks themselves are worried of whose problem and how they will manage their activities on the affair of the banks to ensure efficiency to avoid distress.

The problems faced by banks are as follows

Weak management

Poor loan management

Inadequate capital base

Fraudulent and corrupt practices of owners and managers

Poor Asset / liability management

CCBN briefs (1998)

Connected lending

Lack of Adequate knowledge.

All of the above constitute crisis in the banking industry and this research work will be carried out to proffer solutions and preventive measures to the problems

 

1. 2 RATIONAL OF STUDY.

This research believes it is very important to carry out this research work because crisis in the banking industry has affected the economy in several ways.

It has led to increase in interest rates as depositors ask for higher rates of return for perceived higher chances risk of financial loss.

Crisis in the Banking Industry has led to unemployment, which leads to fall in aggregate demand and consequently a reduction in the production level Orijh (1998).

It has to deposit ruin this affects adversely liquidity and earning capacity of the banks and consequently resulting to decline in availability of invisible funds in the economy.

This research null enables the management of Bank to manager effectively and efficiently.

 

1.3     SIGNIFICANCE OF THE STUDY

The writer hopes to achieve a great thing at the and of the study.  This project will help many that are interested in the banking industry.

It will help than to know the causes of distressed how it can be prevented it will also help to satisfy the need of the following people.

1. Future researchers: It will serve as companion to future researchers who are interested on cause of distress, economic implication and possible remedies.

Investors: It will help them to know that distress exist in banks by so doing they will be careful not to investing banks were there is problem of distress.

Bank: It is of great benefits to bankers when they notice fraud or poor loan management, which will lead to distress they will try to prevent it to avoid liquidation.

Students: It will enlighten the student and afford them the opportunity of appreciatively the contribution towards their study.

It will also help the public or enlighten the public on how distress has cause a lot of problem in our economy.

 

1.4     BACKGROUND OF THE STUDY

According to Dr J. Orjih (1998) the problem of bank distress and failure was observed in the country as far as 1930 and 1958  with the failure of 21 banks Between 1989 and 1996, the financial of conditions of many banks as well non Banking financial institution worsened significantly That  become in the late 80’s several other financial institution became distressed in Nigeria.

It was observed that the number of distress banks increased from 8 to 52.

However, in 1997 there was decrease in distress bank due to action taken by CBN a total of 17 where taken over by CBN in 1995 and one in 1996.

In the 197 the Nigeria deposit insurance corporation (NDIC) took  over the supervision and control of distressed banks. Since the crisis in the banking system the CBN has revoke the license of 31 banks between 1994 to 1998 (CBN) briefs (1989).

 

1.5     DEFINITION OF TERMS

1. CRISIS:

From my under standing I can define crisis as a time of difficulty or danger and in Oxford advanced learners dictionary defined crisis as a time of difficulty or danger. It could also be seen as a time of problem.

MANAGEMENT:

Management: It means getting things done through other people. It may be looked at as a distinct process consisting of activities (planning, organization, motivating and controlling) performed of human and material resources.

It is an activity that converts disorganized human and physical resources into useful and effective result Orjih 1998.

DISTRESSED: definition by, Oxford (Advanced learner Dictionary defined distress as a State of being in danger or difficulty and needed help.

DISTRESSED BANK: A bank may be classified as being distressed when it is unable to meet the bank examination rating system (CAMEC).

Under this critcinon, a bank’s performance is assessed based on its ability to meet the following five conditions

Assets quality

Capital adequacy

Earning Strength

Liquidity sufficiency

Management competency.

Also a bank can be declared distressed when it is not able to meet balance sheet test of having enough assets at market value to cover its liabilities Orjih (1998).

Bank: Bank is an Orjih organization or place that provides financial services Oxford advanced learner dictionary). Any firm, corporate company or society carry on banking business and approved by the minister.

BANKING BUSINESS: It can defined as the business of receiving deposit on current account, savings account or other similar account, paying or collecting cheque, drawn by or pad in by customer provision of finance or such other business as the governor may by order published in the gazette (Ukemenam 2001) .

According to salimon (2001), the CBN assistance director, cooperate and Hours warned against a list of bank regarded as been distress to avoid a run on such banks.

(B) ECONOMIC CONSEQUENCE:

Banks are central to an efficient and effective payment system in any country. But with failure payment system would become precious since the link between the real sector and the financial sector including international settlement would be impoured.

This will inhibit effective competitions and efficient financial intermediation.

Bank distress also leads to loss of money on the part of depositors, share holders as well as government, for instance in 1999 the cost of resolution of distressed banks rose to N6.2 billion from N4.5 billion in 1993, the high cost of distress resolution has significant fiscal and monetary implication as tax payers, through the government would eventually be require for the resolution of bank failure (Ebghoclaghe 2001).

From the 33 banks that were distress and consequently Liquidated a total loans and advances at closure was about N31, 635,97 million, only N3.0-63. 23 million was recovered at december 31. 200. However, this represented 1.74% increase of the total loan and advances from N.796. 87 million, (NDIC Annual report 2001).

(C) GLOBAL EFFECT

The primary counter parts of foreign creditors are the banks as they are the financial gateway to a country, with bank distress.

The international perception of the banking system would be that of suspicion as it will be feared that their find could be locked up and or lost in the banking system.

In most cases, the international community, accept those among them involved in criminal practices such as advanced fee frauds and other types of frauds would not extend credit to a country in which its banking system is distressed.

This would undoubtedly compromise foreign investment and lead to reclamation of capital flight out of the country (NDIC quarterly 1997).

Bank distressed leads to increase interest rate as depositors ask for higher rates of return for perceived higher chances of bank failure and consequent risk of financial loss.

UNEMPLOYMENT:

Bank distress causes unemployment through retrenchment of workers in the distressed backs.

This has adverse consequences for dependents of the retrenched staff.

It leads to fall in aggregate demand & consequence a reduction in the production level.

Bank distress has already degenerated to bank failure and loss of depositors funds.

The maximum amount refundable to each account holder under the NDIC cover for fouled banks is N50, 000 out standing to the credit of their accounts are not paid the difference failed banks would be incapacitated from extending new lending,

The healthy once would be similarly be constrained from granting credit for fear of such facilities becoming diligent, if credit are extended at all they are likely to be short term and mainly to finance commerce and the purchase of further crowd out the productive sector which must be galvanized for the economic.

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