THE IMPACT OF FAILED BANKS ON THE NIGERIAN FINANCING SYSTEM

THE IMPACT OF FAILED BANKS ON THE NIGERIAN FINANCING SYSTEM

PROPOSAL

On the research work of this topic, it is viewed that there is a lot of impact of Failed Banks on the Nigerian Financial system. It covers so many areas, every country has its own specific rules guiding the financial system. This research covers to many areas such as the objectives, significance, literatures and finally the definition terms. It will also focus on very important aspects and areas of the topic such as the structure of the Nigerian financial system, Recent Development, in the Nigerian financial system etc.

The methodology which will be used for my research is questionnaire, personal interview and extensive review of journals and other works on related topics to conclude my research work.

Finally, researchers found out form analysis that the causes of distressed and failures in the financial system have been identified to be cut throat competition in consistent and severe policies mismanagement, in experience, fraud, fraudulent practices and bad debt / injudicious rending.

CHAPTER ONE

1.0     Introduction

• Background of the Study


• Statement of the Problem


• Objectives of the Study


• Significance of the Study


• Scopes and Limitations of the Study


• Research on Bank Problems


• Definition of Terms

 

CHAPTER TWO

2.0     Literature Review

• The Nigerian Financial System


• The Structure of the Nigerian Financial System


• Recent Development in the Nigerian Financial System


• What is Bank Failure


• Types of Bank Failure


• Causes of Bank Failure


• Efforts Being Made to Stem Bank Failure

CHAPTER THREE

3.0     Research Design and Methodology

• Source of Data


• Interview Question


• Sample Used


• Use of Research Instrument


• Oral interview


• Personal Observation

CHAPTER FOUR

4.0     Preservation and Analysis of Data

• Data Analysis Technique


• Response Rate


• Response Rate in Term of Sex


• The Sector Represented


• Have you Heard About Bank Failure


• Bank Failure Experience


• The Most Prevalent Area


• Positive Impact on New Generation Bank


• Negative Impact in Old Generation Bank


• Customers are Happy with Bank Failure


• Regulatory Authorities Have made Enough Effort

CHAPTER FIVE

5.0     Summary of Findings, Recommendations & Conclusion

• Findings


• Recommendations


• Conclusion


• Bibliography

CHAPTER ONE

• INTRODUCTION

1.1     BACKGROUND OF THE STUDY

It has been observed that all over that world each country has its peculiar rules and regulations guiding the financial transaction within the economic system, even if it is public or private, the most important thing is that they are harmoniously functioning as a system to achieve the needed economic and monetary effect. (UGWUANYI 2002:3)

Needless to say that the financial system of any country is a great economic indicator and should be handed with every carefulness. The banking industry or sector being a sub-sector in a country’s financial system has had so many problem. As a matter of fact, the history of failure in the banking system dates back to the 1920’s, when the world economic system was in a great depression it was however peculiar to Nigeria during the 1950’s when indigenous Banks had to phase out or be repackaged like the Agbomgbe (Now WEMA BANK). This was as a result of other things. During the 1990’s, the Nigerian financial system faced a terrible period in her history because of some reasons that shall be discussed in the cause of my work. The shadow of failure is still hanging on the Nigerian system and the banking system till date.

Much as this problem resulted to some unreality developments especially to some banks. It was the antidote or the marketing strategy they needed to draw  the attention of various bank customers to their banks with the view to making them believe that they cannot fail.

This study shall be looking at the Nigerian financial system and also discussing of the remote causes so as to be able to recommend solutions to the problem at the end of the study.

 

As earlier stated, the entire financial system in Nigeria like those in most third world or developing countries is faced with so many crisis. For instance the revocate of the savannah bank licence and the first city bank in the 90’s. All these crisis have had some terrible effect which the lay-man easily sees, ranging from loss of deposit, invested funds and job to mention but a few. The researchers deemed it fit to see the impact of failed banks on the financial system as a whole and not just its environmental impact and also recommend some from of solutions to the problem t hat gave rose to it.

 

 

 

1.3     OBJECTIVES OF THE STUDY

The major objectives of the study is to examine the impact of failed banks on the Nigerian financial system. Other sub-objectives include:-

1. To find out the impact on the big banks.


2. To find out the impact on the new generation bank.

• To know and examine the causes of Bank failure in Nigeria.

1. To recommend based on my findings, measure to adopt to reduce the incidence of bank failure in our financial system.

 

1.4     SIGNIFICANCE OF THE STUDY

this study will be of great significance to the financial system and to the banking sector in particular. It will be among other things.

1. Educate the government on the implication of every financial policies they are pulling in face especially on the inconsistency of their monetary and credit policies.


2. Students offering related course could assess this work for further research or for reference on any related topic.

• The indicators as would be pointed out in this work will educate the general public and prudent depositors on how to make wise choice while considering which bank to transact with.

 

SCOPES AND LIMITATIONS OF THE STUDY

The impact to bank failure on the Nigerian financial system is a vast subject. The area of study will however include on the overview of bank failure, the immediate causes of these failures the extent it has affected the banking industry and the regulatory body to restore the confidence of customer.

 

1.6     RESEARCH ON BANK PROBLEMS

1. Bank failure has no negative effect on the old generation banks.


2. Bank failure has a negative effect on the new generation banks.


3. Bank customers are not happy about the syndrome ravaging the banking system.


4. The regulatory are be blamed for cases of bank failure.

1.7     DEFINITION OF TERMS

1. FINANCIAL SYSTEM

This means various financial institution working together to provide  the financial services required in an economy.

2. FINANCIAL INSTITUTION

This institution facilitates transfer savings from surplus economic unit to deficit economic unit who will utilize these savings in generating investment e.g Banks, insurance companies etc.

3. MONETARY AUTHORITIES

There are institution that regulate and guide the financial rules e.g. Central Bank of Nigeria (CBN), NDIC etc.

4. BANK REGULATION

This refers to the formulation and enforcement of specific banking rules.

5. INSOLVENCY

This refers to the inability to pay liabilities it also means the state of being unable to pay debts as they as they are due.

 

6. MONEY MARKET

This is that segment of the financial market that provides facilities for the exchange of short term funds. It can also be called a market for short-term funds.

7. CAPITAL MARKET

This is that part of the financial market that provides facilities for transfer of medium and long term funds to various economic units. It is also defined as the financial market for long-term funds.

REFERENCE

Ugwuanyi Willy N. (2002), The Nigerian Financial System.

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