THE ROLE AND IMPORTANCE OF CENTRAL BANK OF NIGERIA IN THE PREVENTION OF BANK FAILURE IN NIGERIA.
This study, which is, captioned the Role and Importance of the Central Bank in the Prevention of Bank Failure in Nigeria has revealed the types, causes effects recognition and prevention of bank failure in Nigeria.Some of the findings indicated that banking failure was mainly as a result of poor portfolio management and inadequate capital basis, a majority of the population interviewed acknowledge the fact that bank failure an be prevented. The study also pointed that the Central Bank of Nigeria has not relented in it effort in this light against distress within the Nigeria financial system, illustrating the role banks have to play in the growth of the economy for the well being of the country.Some other causes were identified which were discussed in details encompassing all other causes not mentioned as separate causes of bank failure.These major causes include, macro-economic instability, poor portfolio management, fraudulent activities by directors, the competent and unqualified staff, last but not the least, inadequate capital base. The study concludes its findings by commending the that the Central bank of Nigeria should ensure that banks adhere strictly to the prudential guidelines.The tribunals that have been set-up for the purpose of debt recovery should not relevant in their effort. Workshop should be conducted from time to time to discuss changing economic issues that affect the banking industry either positively or negatively so the bank failure will be cu-tailed to a large extent without causing havoc to the nations economy.
TABLE OF CONTENT
1.1 Background of the study
1.2 Statement of problem
1.3 Objective of the study
1.5 Scope and limitation of the study
1.6 Significance of the study
1.7 Definition of terms
2.1 What is bank failure
2.2 Types of bank failure
2.3 Causes of bank failure
2.4 Effects of bank failure
2.5 How to recognise a distressed bank
2.6 Prevention of bank failure
2.7 The role and importance of the central bank of nigeria in the prevention of bank failure
3.2 Population of the study
3.3 Sample technique
3.4 Research instrument
3.5 Validity and reliability of data
3.6 Method of data analysis
Presentation and analysis of data
4.2 Presentation of data
4.3 Testing of hypotheses
Findings, Conclusion and Recommendations
1.1 BACKGROUND OF THE STUDY
1.2 STATEMENT OF THE PROBLEM
i. What are the function of these banking industries to the economy?
ii. What are really their caused and effect on the economy?
iii. Will the death of a greater number of distressed banks have serious implication on the Nigeria economy?
iv. Will the economic activities be disrupted as a result of distress in the banking sectors?
v. Is there any way wherein the play-out of distress in banking can be arrested?
These are some of the question to which the researcher won’t to find answers to.
1.3 OBJECTIVE OF THE STUDY
The main objective of the study is to verify or ascertain if actually the crash of banks of failure in banks has affected the stable economic growth in the economy. The objectives are:
i. To examine the causes of bank failure
ii. To examine the affects of bank failure, how they can be recognized and how they can be prevented
iii. To explain the role and importance of Central Bank of Nigeria in the prevention of bank failure
iv. To make recommendation on the best ways to prevent bank failure
1. Ho: The CBN does not play any roles in preventing bank
failure in Nigeria.
Hi: The CBN play role in preventing bank failure in Nigeria
2. Ho: The CBN does not monitor the affairs of banks in
Hi: The CBN monitors the affairs of banks in Nigeria
3. Ho: The CBN does not licence other banks in Nigeria
Hi: The CBN licence other banks in Nigeria.
1.5 SIGNIFICANCE OF THE STUDY
These are as follows:
i. It is for the fulfillment of academic requirement for the award of degree.
ii. This study will serve as a source of information to future researchers.
iii. The study will also make the public to know more about the working operation of banks and possible reason for distress in the industry
iv. It will be great importance to both financial and indeed the entire economy that is down turn, facing serious problem of credibility and survival.
1.6 DEFINITION OF TERMS
CENTRAL BANK OF NIGERIA (CBN)
This is the apex bank within the Nigeria financial system, which is responsible for the regulation named supervision of the activities of the banks and other financial institutions operating within the system. It was established by the Central Bank of Nigeria ordinance of 17th March, 1958. It commenced operation on the 1st of July, 1959.
NIGERIA DEPOSIT INSURANCE CORPORATION (NBIC)
Established in 1988 by Decree NO. 22 to add weight to the existing supervisory and control capacities of the monetary authorities to insure the deposit liabilities of licensed banks in the country, provide financial and technical assistance to them.
A sub-see of the Nigeria financial system, which comprises of all banks operating in Nigeria’s money and capital market.
This includes all the commercial and merchant banks.
NON – BANKING INSTITUTION (NBFI)
They are those institution that art not banks but engaged in financial intermediation within the financial system.
These include, insurance companies, financial companies, discount houses and so on.
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