IMPACT ON PROFITABILITY OF COMMERCIAL BANK IN NIGERIA OF INTEREST RATE DEREGULATION A CASE STUDY OF UNION BANK OF NIGERIA

Click here to download our android mobile app to your phone  for more materials and others

COMPLETE PROJECT  MATERIAL COST 5000 NAIRA OR $10 , 

. A FRESH TOPIC NOT LISTED ON OUR WEBSITE COST 50,000 NAIRA ( UNDERGRADUATE) OR 100,000 FOR SECOND DEGREE STUDENTS. $500. PLUS  FREE SUPPORT UNTIL YOU FINISH YOUR PROJECT WORK. CONTACT US TODAY, WE MAKE A DIFFERENT. DESIGN AND WRITING IS OUR SKILLED.  DESIGN AND WRITING IS OUR SKILLED.

Note: our case study can be change to suit your desire location . we are here for your success.

                                   ORDER NOW

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 BANKER SECURITY 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 2 HOURS

How to transfer from your bank account to All  Nigeria banks without internet

1. Access Bank:
—-*901#

2. EcoBank:
—-*326#

3. Fidelity Bank:
—-*770#

4. FCMB:
—-*389*214#

5. First Bank
—-*894#

6. GTB:
—-*737#

7. Heritage Bank:
—-*322*030#

8. Keystone Bank:
—-*322*082#

9. Sky Bank:
—-*389*076*1#

10. Stanbic IBTC:
—-*909#

11. Sterling Bank:
—-*822#

12. UBA:
—-*389*033*1#

13. Unity Bank:
—-*322*215#

14. Zenith Bank:
—-*966#

15. Diamond Bank
—-*710*555#

To know your BVN, dial
—-*565*0#.

E.g for First bank…   *894 *Amount *Acct. No. #

Please dail d code from d number u used to register d account from the bank

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.

WE HAVE SECURITY IN OUR BUSINESS.   

MONEY BACK GUARANTEE

 

Click here to download our android mobile app to your phone  for more materials and others

 

ABSTRACT

This researcher work is a survey of an analysis of the effect of interest rate deregulation on the profitability of commercial banks. The research to work tried to find out among other objectives, the impact of deregulation of  interest rate policy on the profitability of commercial bank. In carrying out the research, the regression and correlation method were use to analyze statistically to tools. The result obtained indicated from the hypothesis tested that the null hypothesis was rejected.

However, it was discovered from the findings of the research that deregulation has contributed relatively in the development of the economy thus.

It has engendered competition among bank and other institutions for deposits as well s some non  – traditional activities. Saving mobilization has also been encouraged by demand and supply which determined inter4est rate.

It has also induced the bank to source for idle funds, which are sent to deficit area to encourage loans and advances .

Sanity has been encouraged in some banks as they are now beat on judicious use of  their available funds and hence allocated it  to the most profitable ventures.

The study also reveal that there was also increased in the economy by deregulating interest rate, it become incumbent on the side of the researcher to make the following recommendation. That the changes in the rediscount rate at any given period should be  between the range of 15% and 25% depending on the monetary policy pursued or intended to be pursued.

That written the framework of the current market economy in relation to interest rate, there should  be a sufficient institutional control or regulatory legislation to ensure that the very vital sector of the economy that ordinarily would not survive the economic regime of deregulation are adequately created for.

TABLE OF CONTENTS

CHAPTER ONE

• Introduction 1

1.1    Background of the study                                 7

• Statement of the problem 9
• Objective of the study 10
• Researcher Questions 11
• Formulation of hypothesis 12
• Significance of the study 13
• Scope and Limitation of the study          14
• Definition of terms                                         16

CHAPTER  TWO

REVIEW OF  RELATED LITERATURE 

• Definition of Interest rates 19
• Structure of interest rates 22
• Different Approaches to interest rate determination 31
• Relationship Between profit and interest rate 35
• Reasons and method of regulation 38
• Effects of Regulations on Banks 45
• Concept of deregulation 50
• Reasons for Deregulation 52
• Implications of deregulation case Against Deregulation 54

CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

• Research Design 64
• Sources of Date 65
• Primary Source of Date 65
• Secondary Sources of Date 67
• Location of Date 68
• Area of Study 68
• Population 69
• Sample size determination and Sampling Technique69
• Instruments of Data Collection 71
• Data Collection 72
• Data Treatment 72

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

• Test of Hypothesis 75

CHAPTER FIVE

SUMMARY , RECOMMENDATION AND CONCLUSION

• Summary of Findings 105
• Recommendations 107
• Conclusion 108

Bibliography                                                           114

Appendices

Application to Respondents sample of Questionnaire 117

 

 

 

 

 

CHAPTER ONE

INTRODUCTION

         Before, 1987, the interest rate management policy was one of the control function by the Central Bank o Nigeria (CBN) which fixed the minimum saving rates and maximum lending rates for financial institutions. This was the are of administering interest rate regime. Following he introduction of a market based interest rate policy in 1987 by the Central Bank of Nigeria (CBN) bank were allowed to according market conditions through negotiations with been customers. Ever since then, there has been significant impact of such deregulation policy on the Nigerian economy especially on the profitability of commercial banks.

In directing bank to pay interest on current account deposits by the Central Bank of Nigeria (CBN) is in the context o the deregulation framework. This is implied by the negotiation between the banks and their customers on the interest rate payable on deposits for special purpose held for more than seven days. To further ensure that customers are not exploited, the Central Bank of Nigeria (CBN) has further directed that the reducing balance method should be applied in calculating charges on loans, payable in agreed installments.

Following the introduction of a market based interest rate policy in 1987 by the Central Bank of Nigeria (CBN) banks were allowed to determine their deposit and landing rates according to market conditions through negotiation with their customers. However, the minimum rediscount rate (MRR) continued to be fixed by the Central Bank in line with changes in overall economic conditions. For instance, the MRR which was fixed at 15 percent in August 1987 was reduced to 12.75 percent in December 1987 with the objective of stimulating investment and in the economy following the need to moderate monetary policy. In 1989, the MRR was raised to 13.25 percent in furtherance of the flexible interest rate policy; the CBN introduced securities (Treasury bills and certificates) in 1989. Under the system, authorize dealers submitted competitive bids through which the issue rate emerged. The lack of responsiveness of the structure of deposit and lending rates to market fundamentals, particularly the decline in inflation in 1990 compelled the authorities in 1991 to fix a minimum spread of 4 percentage points between the cost of funds of commercial and merchant banks and their maximum lending rates. The  banks were therefore, directed to observe a minimum lending rate of 21 percent and a minimum deposit rate of 13.5 percent. The banking measure claming that it was against the deregulatory posture of the government while the reported rates changed were within the guidelines. There was sufficient evidence that actual rates were higher. As if   were the benefits of the policy were largely8 marginal. Hence, the ceilings on interest rates were removed in January 1992.

This policy was retained in 1993 in the course of the year interest rates were met only distorted and volatile but also rose to unprecedented levels. The behaviour of interest rates was traceable to a number of factors, which include the following.

1. The high rate of domestic inflation arising from the huge fiscal deficit of the federal government which was financed mainly by the Central Bank of Nigeria.

1. The undue discretion which the deregulation of interest rates conferred on key market arbitraging activities of market speculation.

• Technical insolvency and serious cash flow problems on the part of same weak banks resulting in distress borrowing.

1. The use of stabilization securities and the system of allocation of foreign exchange both of which induced the sterilization of large funds at the CBN.

The prevailing high interest rates in 1993 discouraged investment in the directly productive sectors of the economy while volatile inter bank