Bank Recapitalisation and its Effect on Nigerian Banking Industries : Current School News

Bank Recapitalisation and its Effect on Nigerian Banking Industries

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Bank Recapitalisation and its Effect on Nigerian Banking Industries.

ABSTRACT

This research is carried out on the problems that have pervaded the Nigerian Banking Industry in the last two decades, which eventually led to distress in the “Herculean” task of recapitalization.

The topic examines recapitalization from the point of distress and its causes in the financial system, taking cognizance of customer’s unwillingness to save and the poor banking habit which is due chiefly to the fact that they have lost confidence in the Nigerian banking industry.

The scramble for cash to meet up with the recapitalization requirement is also carefully looked at here.

The study also offer positive suggestion not only as to how they can consolidate their financial position to avoid being caught in a position of unpreparedness for future recapitalization increases.

Lastly, it tries to educate the readers on the ways recapitalization can help to address (if not totally eliminate) the problems in the banking industry and its numerous benefits to the national economy.

TABLE OF CONTENTS

Title Page——————- i

Declaration—————- ii

Dedication—————— iii

Approval Page————— iv

Acknowledgment———- v

Abstract————– vi

Table of Contents——- vii

CHAPTER ONE:

  • Introduction – –        –        –        –        –        –        –        1
  • Statement of the Problems – –        –        –        –        –        4
  • Objective of the Study –        –        –        –        –        –        5
  • Significance of the Research –        –        –        –        –        6
  • Scope of the Study – –        –        –        –        –        –        6
  • Limitation of the Study –        –        –        –        –        –        7
  • Definitions of Terms – –        –        –        –        –        –        8

CHAPTER TWO – REVIEW OF RELATED LITERATURES

  • Development of Banking Industry in Nigeria –        –        –        13
  • Types of Banks in Nigeria and their Business –        –        –        18
  • Distress Syndrome in the Development of Banking in –        23
  • Effects of Distressed Banks on the Nigerian Economy –         –        32
  • Historical Development of Banking Regulations – –        –        34
  • The Concept of Capitalization –        –        –        –        –        53
  • Banks Reserves and Why Banks Keep Reserves – –        –        55
  • Reasons for Introduction of Bank Capitalization – –        –        58

CHAPTER THREE

  • Research Methodology –        –        –        –        –        –        60
  • Data Collection Techniques- –        –        –        –        –        61
  • Justification of the Techniques Used –        –        –        –        62
  • Population and Sampling –        –        –        –        –        –        63
  • Sampling Procedures Used – –        –        –        –        –        63

CHAPTER FOUR – DATA ANALYSIS AND PRESENTATION

  • Introduction – –        –        –        –        –        –        –        65
  • Banks Lending and Credit Administration – –        –        –        66
  • Debt Recovering Process of Banks –        –        –        –        68
    • Unsecured Debts Recovering –        –        –        –        –        69
    • Secured Debts Recovering –        –        –        –        –        –        69
    • Enforcement of Security –        –        –        –        –        –        70
  • Recapitalization Policy of the Federal Govt. of Nigeria (1997) – 73
  • Recapitalization: The need and reason for a stronger capital base- 75
  • Recapitalization option –        –        –        –        –        –        75
  • Problems associated with recapitalization –        –        –        83
  • Advantages of a strong capital base –        –        –        –        86

CHAPTER FIVE

5.0     Summary      –        –        –        –        –        –        –        –        89

5.1     Conclusion    –        –        –        –        –        –        –        –        90

5.2     Recommendation    –        –        –        –        –        –        –        91

Bibliography –        –        –        –        –        –        –        –        –        95

Appendix      –        –        –        –        –        –        –        –        –        97

INTRODUCTION

It is widely recognized that the financial system plays a vital role in the economic development of any country. This is done basically through certain institutions in the system, which include such sectors like the banks who are mostly concerned with separating the savings and investment function within the economy.

Such that those that save at any particular time need not be those that have to invest at that same particular time. Therefore the financial system includes the banking institutions, which are very important in the payment and collecting systems.

An efficient financial system is very important and widely accepted as a necessary condition for the effective functioning of a nation=s economy.

A responsive banking system is Central to the attainment of a sound economic base and its economic performance has far reaching political implications.

Banks facilitates economic transactions between various national and international units financial sector is usually aimed at ensuring a safe and sound system where depositors are protected.

REFERENCES

ADEKANYE, (1986) – Element of Banking in Nigeria. Marina- Lagos. F&A Publishers Ltd.

AJAYI, O. Regulation of Banks and Financial Institutions. Lagos Academy, 1991.

ADETUNJI, A. Machinery for Recovery of Banks Credits and Advances: The Alliance (4th Quarter 1987) pg. 10-11.

USMAN & M. SHABA A Term Paper on Bank Lending and Credit Administration. (Unpublished).

Central Bank of Nigeria (CBN)’s Monetary and Credit Guidelines for 1997, 1998 and 1999 Fiscal

Central Bank of Nigeria Economic and Financial Review Vol. 31 No. 1, March, 1993.

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