CAUSES AND implications OF BANKING DISTRESS IN NIGERIA
CAUSES AND IMPLICATIONS OF BANKING DISTRESS IN NIGERIA
CAUSES AND IMPLICATIONS OF BANKING DISTRESS IN NIGERIA
BANKING DIFFICULTY: Is a condition in which the banking system as a whole has negative capital and current profits are insufficient to cover losses to the point where the banking system cannot generate internally positive capital.
However, banking distress has been the talk of the town, and it has become so prevalent that even bank clients are on the lookout for and aware of bank distress, which may or may not occur.
Bank distress has been a cankerworm that has eaten deep into the banking stem, causing individuals to die, become frustrated, sick, depressed, poor, and even insane overnight.
Take, for example, the former (ACB and Savanah Bank). These two have driven some individuals to poverty and some to premature death, some have gone insane overnight, some have dropped out of school, some families have gone hungry, and some businesses have closed down/folded up.
Furthermore, every problem has a solution; there are some measures that could be taken to eradicate this cankerworm that has eaten deep into the banking system; one of the measures, and the most important, is that before any bank should start in existence, they should ensure that it is a registered bank with every statistic ready for operation;
another important one is capable management, which must be very strong. Technological know-how, trained experts, and another critical element is SITING, or where the bank will be built,
whether insane opposite or at the SITE. You also evaluate the objective and the type of business that the individuals around you are involved in.
Apparently, there should be won for additional training of the staffs, and a decent conduct, especially from the staffs, on how to welcome and handle customers, because there is an idioge that says “one good turn deserves another.” If all of these measures are implemented, bank distress should be eliminated.
Finally, a recommendation for employees to travel outside of the country for a course must be in place in order for them to gain new ideas and innovations that can aid in the development of the banks, which leads to civilisation. Embezzlement of bank funds, as well as all forms of fraud, must be eliminated totally.
1.1 BACKGROUND OF THE STUDY
Bank distress has always been a challenge that financial institutions must deal with. The age of all for free banking in Nigeria, which can be traced back to (1892) when banking began in Nigeria,
allowed for the development of many banks because there were little or no laws governing the banking activity. Because there was no rule or regulation governing bank establishment, many banks were created with insufficient capital.
Furthermore, the era of the Structural Adjustment Programme (SAP) and deregulation introduced a new face to the banking system, resulting in the establishment of numerous banks in Nigeria. As a result, many more banks were formed in our country.
However, as more laws governing the banking industry were enacted, some of these mushroom banks were impacted. Such laws were governed by many bodies, including BOFIA, CAMA 1990, NDIC, and others.
These bodies include the Banking and Other Financial Institutions Act, the Company and Allied Matters Act, the Nigerian Deposit Insurance Corporation, and others.
However, bank distress became a concern in the country when these regulating organisations began to scrutinise these banks' actions. In fact, several of them became distressed as a result of failing to meet the banking CAMEL. Capital Adequacy, Assets Quality Management Competence, Earning Strength, and Liquidity sufficiency are all terms used in this context.
In fact, by 1954, nearly all of the indigenous banks that had sprang up during the free-for-all banking period had become distressed and had failed. During this time, only three of them survived:
the National Bank of Nigeria, the Agbonmagbe Bank (now WEMA Bank), and the African Continental Bank. In fact, they were able to survive due of state government help.
1.2 STATEMENT OF THE PROBLEM
Having witnessed all of the government's steps to avoid bank distress by establishing regulating agencies and legislation to avoid distress. Many banks are still in difficulties. The question now is, why do banks continue to experience trouble despite all of the guidelines created by various regulatory bodies?
TOPIC: As a result, it is intended that it will serve as a foundation for future academic experiences. The research is expected to be extremely beneficial to international investors in the country. Manufacturing companies such as pharmaceutical, food processing, building materials, and banking should be exempt from the relief.
Banking should be more flexible in allowing such charges to be deducted when calculating Nigeria's banking profit. Entrepreneurs who wish to build a bank in their preferred location may be drawn to poor areas if more governors and banking incentives are made available to businesses established in such places.
1.3 OBJECTIVES OF THE STUDY
The researcher has decided to learn the following about the topic “The Banking Distress in Nigeria, Causes and Implications” for the purpose of this investigation.
These are some examples:
to learn more about banking distress
To find out when it began in Nigeria,
Identifying the causes
Identifying the economic repercussions
To suggest a potential solution to the problem
1.4 significance OF THE STUDY
The research findings, as well as the conclusion and recommendations, will be important to future researchers in the following ways.
Despite the fact that this work reflects substantial efforts, it is not exhaustive at the:
TIME FACTORS: One of the most significant constraints is time. This is clear, because the researcher works hard to complete the other academic plan within the time frame specified.
MISSING statistical DATA:
All of the statistical data required for the study could not be obtained by the researcher in the local government under examination, therefore using data from other local governments is unnecessary.
Another issue that the researcher discovered during the course of this study was a lack of expertise.
exporting commodities to another country