The desires to carry out this research work on new banks grose from the fact that the central bank of Nigeria policy on the establishment of these new in this country has been posing a lot of problems, which resulted to the unsatisfactory performance, and problem unpending failure of the new banks. This paper therefore aims at examine the problem of these new banks, the impact of these problem with banking industry and the possible strategies in by which such problem cam be solved.
This research work is not in any way an exhaustive study of problem of new banks in Nigeria because to get a clear, through and exhaustive over view of these problem of new bank in Nigeria would involve a Leary expenditure beyond the finance of this research. The following areas were therefore studies causes of bank failure. How to unproved the safety of banks organizational problem of new banks project of new and policy recommendation made, conscious of the fact that many unportant problems relating to the subject were not treated because of time and money.
Government, established bank for development purpose and the role played by banking industry in an economic development cannot be over emphasized Some banks are owned by government for example first bank of Nigeria union bank etc.some by the combination of government and individuals. However, banks in Nigeria and the other countries of the world are established to carry out the following functions.
1, To safeguard money and over valuables.
2, Mobilization of savings and other deposits.
3, Extension of credit facilities to customers.
4, Management of customer’s investment and advising on insurance of maters.
5, Creating money.
6 provide facilities for the financing of international trade example to commentary credit.
7, providing foreign exchanges facilities for trade.
8, proving advising services
However, the above functions and duties of banks is just mention but, a few because banking industry is dynamic in nature. It raries on public confidence and due to its influence on the nation economic life, it need high quality management and organizational structure with which it can attain maximum operating efficiency and profitability.
Since the advent of structural adjustment programmed (SAP) and it’s deregulating polities, banking industry in Nigeria has been receiving a number of policy shocks and the new bank felt it most such policy or guidelines include. The central bank of Nigeria guideline in reserve requirement and limited capital based for establishing of new banks.
Other directives are the withdrawal of government banks the payment of interest on current account cancellation of foreign denominated naria loans. The liberalization of foreign exchange market. The introduction of the controversial national deposit insurance corporation apart from this policy the new banks are facing other problem such as competition. The cause of these competition that new bounds in the banking adverse is an increase in the number of banks and the simultaneous invasion by other financial institution of what had previously been regarded as the traditional banker preserve .the establishment of number of branches in rural area where banking has not been inculcated is another problem.
Some examples of the new banks in operation are:
SERVICES RENDERED BY NEW GENERATION BANKS
The new generation banks render the following services to their customers.
1, depositing and withdrawal of money in any of the branches a customers who banks with the branch of the bank in Enugu can deposit or withdrawal such money in any other branch in Enugu and outside the town. This special service reduces the carriage of cash thereby reducing the risks associated with carrying cash.
2, Internet computer services –the services of some generation bank can be rendered through the Internet. The banks can market their product through the Internet over the world.
3, Checking of accounting balance through the electronic handsets. The new generation banks perfected the use of electronics communication equipment like handset in sending account balances to customers.
4, intern rants banking. The new generation banks practice intern rant banking by moving to customers houses and office to market their products this special services has no doubt increased their over tremendously.
5, sponsoring world class sporting activities. They are also involved in the sponsorship of world class sporting activities like world cup, lawn tennis sports etc.
6, the new generation banks render special services like business consultancy, they write fecisibility studies for new business and advice their owners an how commence business.
7, some of the new generation banks get involved in courier service –during parcels, mail and special message for their customers.
STATE OF PROBLEM:
The major problem facing new bank in Nigeria has its origin from central bank of Nigeria (CBN) guidelines or directive. These directives are of two kinds -:
1 Directive on the establishment of new banks
2 Measures introduced to reduce liquidity in the economy-
These measures affect new most because of their age in the industry.
Prominent among the measure which the government pursues in this regards lies with the withdrawal of deposit of parastal and other government agencies from financed intermediaries.
Other includes the cancellation of foreign guarantee for naira denominated loan and the liberalization of foreign market.
These measures are enforced at the same period and at a time when liquidity ration have already gone high. These affected the new banks drastically because of their delicate capital base. Secondly, the economic restructual programmed give rise to the devaluation of naira as it sought for the actual valve of naira in the international market. Such devaluation consequently led to high cost material and fixed assets, which affected the development of new banks.
1.3 RELEVANCE OF THE STUDY
The objective is to known the problem of new bank in Nigeria and to recommend will minimize the problem it is also to recommend way of avoiding the problem in future considering the adage make has while sunshine.
1.4 LIMITATION OF THE STUDY
Researcher are faced with many limitation during research the limitation faced are no cooperation with bank manager visited. Banks manager and workers when ask question in certain thing they will not answer they be beating about the bush.
Secondly, non-availliabity of text book to write out point. Thirdly, the problem of easily getting the appropriate data due to bureaucracy which huders the information flow in the country.
Finally. Lack of adequate fund and time to enable the research visit many places and collect necessary data.
1.5 SCOPE OF STUDY
The scope of the study is to known the problem facing the new banks in Nigeria, how it was originated what brought the problem and the solution to the problem and way of preventing future occurrence.