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The primary goal of this study was to investigate the subject of bank distress in Nigeria.

The recent increase in bank crisis in Nigeria prompted and inspired us to engage on this project inquiry.

The researcher intends to carry out the investigation in order to discover the problems that cause financial difficulty in Nigerian banks, as well as possible solutions to such difficulties.

Related literatures were studied to learn about other people’s perspectives on the topic and related themes in the banking business. The acquired data was tested and analysed.

In chapter five, statistical techniques were utilised, and conclusions on this hypothesis were made. Recommendations were also made based on the examined material.

Finally, findings on the topic investigations were reached.


Before delving into the causes of bank distress in the Nigerian economy, it is more significant or convenient to trace the origins of banking and its significance. Banking began in England with the activities of the Goldsmiths,

who realised that by frequently keeping money in safes for their customers, they could make money by lending it to other people. On the other hand, they realised that they could cover for unexpected demand by paying interest to depositors.

The method quickly attracted a large number of depositors and borrowers, and thus established the basis for the entire development of the banking industry in England; it was later transported to West Africa during colonialism.

There has never been a satisfactory definition of what a bank is or who a banker is. Several attempts have been made to provide a thorough and appropriate definition of the term banker.

A banker, according to J.W.Gilbert, is a dealer in capital, or more precisely, a dealer in money. He acts as a go-between for the borrower and the lender.

He lends to one party and borrows from another.

This definition focuses on two basic bank functions: deposit mobilisation and loan and advance granting.

In Nigeria, the Banking Act of 1952 defined banking as the business of accepting money from the public on current account, repayable on demand by cheque,

and providing advances. The founding of banks and the practise of banking were restricted to firms with legal licences.

Based on these definitions, a banker is any individual or corporation that offers basic banking services and is licenced as a bank by the federal government of Nigeria.

These are the minimal banking requirements:

Receiving deposits from customers, making payments locally or internationally, issuing loans and advances, trading in securities, clearing cheques, and dealing with similar entities.

A banking decree contains the rules that must be followed for the founding of a bank.

1996 (Section 2), which has now been superseded by Decree No. 24/28 of 1991, which gives the CBN the authority to licence banks.”

The financial institutions are Nigeria’s commercial banks are divided into three types: merchant banks, development banks, and the central bank of Nigeria, which serves as the apex bank. Each of these organisations provides various types of services to the public as mandated by the CBN.

Indeed, commercial banking is a relatively new industry, with the majority of them being offshoots of huge multinational commercial banks with headquarters in Europe. America and Asia are two continents.

Nigerian indigenous banking is still in its early stages. The history of commercial banking in Nigeria dates back to 1892, when the African Banking Corporation in London opened a branch in Lagos.

In 1894, the Bank of British West Africa (BBWA), now the first bank in Lagos, took over the African Banking Corporation.

On February 11, 1933, the National Bank of Nigeria (NBN) was created in the indigenous sector. Africa Continental Bank Ltd. followed suit.

Others include the British and French bank ltd, now known as the United Bank for Africa (UBA) plc, which was founded in 1949: Wema bank ltd, co-operative and commercial bank ltd, orient bank ltd, and others.

Nigeria saw a period of bank proliferation from 1960 to 1962.

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