EVALUATION OF liquidity ASSETS MANAGEMENT IN FIRST BANK OF NIGERIA PLC
EVALUATION OF LIQUIDITY ASSETS MANAGEMENT IN FIRST BANK OF NIGERIA PLC
Money is the language of business, and money is the business of financial institutions. As a result, no firm – large, medium, or small – can thrive without finance. Financial institutions should make every effort to develop their credit policies, as they are the primary sources of capital available to small businesses.
For many years, the importance of small scale industries in terms of their role in Nigeria's economic development has never been overstated, hence their demand for long – term finance has grown. Despite the government's efforts to support the development and strength of small-scale companies, financial institution aid remains insufficient.
The fundamental issue affecting small scale enterprises is that they comprise the second largest sector in the Nigerian economy, bearing the brunt of the existing deficit in the Nigerian financial system.
It is worth repeating that one of the federal and state governments' objectives is to achieve socioeconomic development of the goal cannot be achieved without the development of rural areas,
the growth of small – scale industries in rural areas serves as one of the main vehicles of transforming the nations and the subsequent enhancement of the state's socioeconomic growth.
Indeed, it has been seen that small companies play an important part in social and economic development initiatives in newly industrialising countries. Small-scale industries help the government provide job opportunities, which decreases surplus labour. This tends to reduce the influx of labour into cities.
This sector has permitted Nigeria's industrial sector's rapid expansion and diversification. The sector is diverse in that it relies on not only huge industries but also small businesses, and that large industries fail. The little ones could be made to generate and provide the essential service.
It is worth noting that, despite their small size, these small-scale firms serve an important purpose in our economy. Small and medium firms must leave no stone unturned in order to give raw materials and other inputs to large industries,
with the goal that they would grow into huge enterprises as new ones rise up to replace them and the old ones continue in the process of economic growth and development.
Interviews and questionnaires were employed as research instruments for an objective analysis. The interviews were conducted with a chosen group of small-scale industrialists. According to the findings,
the involvement of financial institutions in the growth of small-scale companies in Nigeria is insufficient. As a result, the null hypothesis is accepted. Finally, some valuable recommendations for increasing financial institutions' aid to small enterprises have been offered.
Banks have been accused of taking excessive risks in novel settings and lines of business. The advice is for banks to avoid greater exposure by threatening to shift tradition that will comprehend the actions of banks, but are being paid by their shareholders to maximise holder's wealth over time.
To reach this goal, banks must look for opportunities in the financial market and lend to manage risk by developing a more systematic risk control system. At this time, it appears acceptable to create a separate management control mechanism for each additional risk aspect.
In contrast, the system being created by bankers permits any new type of risk to become a new piece in a bank's overall analytic area. This strategy necessitates an information environment that allows risk managers to assess all of the risks associated with a specific transaction.
1.1 BACKGROUND OF THE study
The goal of this project writing is to reveal how liquidity assets are managed in Nigerian banks. My case study is first bank Yabubu Gowon Way Kaduna, and the type of services supplied by first banks in liquidity management.
The banks that are in the business of delivering appropriate service are as follows:
i. Provide universal banking services to corporations
ii. Makes loans and advances to customers
Leases are the third type of contract.
iv. Services in Investment Banking
v. Financial Advisory Services to Corporations
vi. Currency exchange services.
1.2 STATEMENT OF THE PROBLEMS
The first bank Nigeria Plc, like all other banks, is obliged to offer prompt and efficient services to both customers and interested parties. Banks should understand the value of time and strive to service their customers as quickly as feasible. clients are the bank's business, which is why they are regarded as assets of the cast and other valuable goods deposited to them by their clients.
This is why every piece of paper in the bank is considered money because it mentions it. One of the functions of banks is to make loans to customers in order to help them carry out various initiatives for the development of the country's economy.
In this regard, both customers and banks have the same goal in mind: profit. In other words, in order for the system to work smoothly, both the bank and the clients must do their roles.
In most circumstances, the two sides always make things difficult for each other on the part of the honest and firm so that the bank may establish a solid reputation and develop a strong banker-customer connection.
Under normal circumstances, the banking industry is supposed to carry out its activities not just efficiently but also accurately.
However, this is almost apt, and when looking at the difficulties of bank clients, it can be observed that the guilt is shared by both parties. Some of these issues are as follows:
i. Account Opening: Accounts are opened in accordance with the procedure established by the customer, who believes it is a waste of time and is unaware that the banks must exercise caution in this sensitive matter.
When a consumer opens an account, all required data is collected from them to be utilised in payments and other future transactions.
ii. Cash Withdrawal: In this situation, the banker must confirm the legitimacy of the charges or withdrawal slip (in the case of a savings account).
This may take some time, and the customer may feel he or she is squandering time. Because it is the bank's responsibility to safeguard any funds in its control, contentment is essential.
iii. Obtaining a Loan from a Bank: It is a basic principle and natural fairness that a loan should only be issued with security, and the security must be sufficient to cover the debt. In most circumstances, the buyer disregards the
1.3 OBJECTIVES OF THE STUDY
The goal of this study is to evaluate how efficiently and effectively liquidity can be evaluated in Nigerian banks in order to avoid bankruptcy. It is also aimed at affecting a concrete control over consumer borrowing of limited resources available to banks in order to avoid bankruptcy.
It is also intended to have a concrete impact on client borrowing from the bank, as well as efficient administration of the bank's limited resources.
i. From the bank to third parties at the customer's request.
ii. From the customers to the banks
iii. From the bank to its clients
iv. To and from other banks, including the Nigerian Central Bank.
1.4 RESEARCH HYPOTHESIS
The following hypothesis was created as a beginning point for the research endeavour.
Ho: Evaluating liquidity management in Nigerian banks has always gone well.
Hi: Liquidity management evaluation in Nigerian banks has not always been without issues.
1.5 SIGNIFICANCE OF THE STUDY
The following are the goals of this study project.
i. Determine the extent of risk in liquidity asset management and how such risk might be eliminated. This project will, ideally, benefit the management of First Bank Plc as well as other Nigerian institutions.
ii. To meet a portion of the requirements for the issuance of a national diploma in accounting
iii. This initiative will serve as a foundation for future research on this area.
1.6 SCOPE AND LIMITATIONS OF THE STUDY
All banks and other financial institutions deal in liquidity, thus managing liquidity is important; however, this study will focus on how Nigerian banks managed liquidity, with a special emphasis on the First Bank Plc. Yakubu Gowon Way branch as a case study.
i. Difficulty obtaining bank-related documents
ii. Insufficient time due to the limited time available for study and project writing.