ABSTRACT
This study is
intended to evaluation the effect of banking regulation on the performance of
the Nigeria banking system from 1999-2006. Since bank failure and
distress may result in server monetary contraction and dislocation of the real
economy making people to loss confidence in the banking system. This
brings about supervision and regulation of banks in order to improve the
performance of the banking industry.
The objective of
undertaking this research therefore includes the following.
To find out the
necessarily to regulate banks
To find out the
necessity to regulation/ guidance on the operations and performance of the
banking industry and to find out the feeling of bank personnel concerning there
regulation.
The hypothesis used in
the work are as follows:
Ho:
It is not necessary to regulate banks
Hi:
It is necessary to regulate banks
Ho:
Banking regulations/guidance have no posture impact on the
performance of the
Nigeria banking system.
Hi:
Banking regulations/guidance have a posture impact on the
performance of the
Nigeria banking system.
Primary and secondary
sources of data were in writing this research work the methodology used is the
chi-square model and the operative assumption used are degree of freedom given
as (R-DCc-1) and level of significance is 5%.
Form the analysis the
following awning other were the finding.
Regulation of the
banking system in Nigeria are desirable of the in that their implementation
will sanitize the banking system and improve their performances in the long run
secondary many of the old banks that are heavily burdened with bad and doubtful
debts have begun to bear the effects in different degree of the implementation
of this regulatory guideline.
Based on the findings
the following among other were recommended. Government should embark on
feature regulation and deregulation of the banking system. When necessary or
distress this banking regulation/guideline should be backed with sanctions.
TABLE OF CONTENT
CHAPTER ONE
Introduction
1.1
Background
1.2
Statement of problem
1.3
Objective of study
1.4
Research question
1.5
Research hypothesis
1.6
Significance of the study
1.7
Scope and limitation of the study
1.8
Definition of terms.
CHAPTER TWO
Literature review
2.1
Definition of banking regulation
2.2
Background to the banking regulation Nigeria
2.3
Why it is necessary to regulate banks
2.4
The nature of banking regulations
2.5
Role and impact of banking regulations on the bank operation and performance.
2.6
Implication on the establishment of new banks
CHAPTER THREE
Research design and
methodology
3.1
Area of study/coverage
3.2
Sources of data
3.3
Sample and sample determination
3.4
Analytical technique
3.5
Decision rule
CHAPTER FOUR
Data presentations and
analysis
4.1
Tables
4.2
Test of hypothesis
4.3
Interpretation of result
CHAPTER FIVE
Finding recommendation
and conclusion
5.1
Findings
5.2
Recommendation and conclusion
Bibliography
Appendix
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUNDS
OF THE STUDY
Confidence is the pillar
or pivot around which banking revolves. Hence lack of confidence by
depositor in the stability of a bank can lead to serious problem for such a
bank. Official concern for the stability of bank failure may result is server
monitory contractions and dislocation of the real economy.
Therefore this given
rise to the supervision regulation of banks in order to improve the performance
of the banking industry.
The government considers
an affective system of matter of matter of first importance. The primary
role is to reduce the risk of capitals loss to the depositor. In this way
supervision also perform a wider role by stability the whole banking
regulations play in the effective management of banks in order to improve their
performance led the monetary authorities to issue guideline for licensed banks
and their auditors in November 1990.
The monetary authority
have given a strong indications of their determination to improve the
performance fog the Nigeria banking industry by regulating the industry and to
make sure it is absorbed. The fact that in deregulated financial
environment bad debt have continued shows the imperfection of the market system
inability to protect the interest of depositors and the financial system.
Hence guideline
regulation and their implementation are necessary to protect the economy as a
whole. Viewed from this perspective the regulation and guideline are
capable of industry sanity into the system by inducing banks to improve the
quality fog their loan portfolio’s, ensure discipline in lending and unanimity
in reporting especially regulation will enable banks to adopt a move provident
and him form approach in their classification of credit portfolio, providing
for non performing facilities creditor disclosure interest on non performing
assets and off balance sheet engagement.
Hopefully they will
ensure reliability on published accounting information and operation result and
also save banks from attracting hinder attention and operating result and also
save banks form attracting hinder attention to one another. Therefore,
because of their pivotal position and role in the saving and investment process
and in promotion of monetary policy and other macroeconomic objectives of
government banks are resulted to correct market failure and ensure stately and
systematic stability of the financial system not only nationally but also
internationally.
1.2 STATEMENT
OF PROBLEM
This research is concerned with the problem of
banking regulation and performance of the Nigeria banking industry
(1990-20060).
In spite of many banking
regulation banks failure and bank distress which occur frequent in our present
day economy. In Nigeria many businessmen have decided not to deposit
their monetary in the bank to avail capital loss. And this research work
want to restore confidence in our banks in order to changers the attitude of
those who cost confidence in Nigeria banking system.
1.3 OBJECTIVE
OF THE STUDY
1. To
find out whether preventions of network failure is one of the effects of bank
regulations one the performance of Nigeria banks
2. To
find out whether the frequency appointment of bank director and top management
staff of bank is one of the effect of bank regulation on the performance
of Nigeria banks.
3. To
find out whether controlling the power to grant credit out hence over all
equipment in the economy is one of the effect of bank regulation on the
performance of Nigeria banking industry.
4. To
identify the different ways banking regulation affect the performance of
Nigeria banking.
5. To
find out whether the operating minimum capital base of Niger bank can be
describe one of the effect of banking regulation on the performance of banking
industry.
RESEARCH QUESTIONS
1. Does
prevention of network failure effect bank regulation on the performance of
Nigeria bank?
2.
In what way can the frequency of appointment of bank director and top
managements staff of bank effects the bank regulations on the performance
of Nigeria banks.
3.
Is the controlling of power banks to grant credit by the CBN on of effect of
banking regulation on the performance of Nigeria banking industry?
4.
In what different ways do banking regulation can affect the performance of
Nigeria banking industry
5.
Is the termination of the actual minimum operating capital base of bank in
Nigeria on the effect of banking regulation on the performance of Nigeria
banking industry?
1.4 RESEARCH
HYPOTHESES
Ho:
Banking regulation guideline have no positive impact on the
performance of the
Nigeria banking industry
Hi:
Banking regulation guideline and performance have positive impact on
the performance of the
Nigeria banking industry
Ho:
The failure if many bank in Nigeria in recent
time is not due to lack of
regulation and effective supervisor of the
Nigeria banking industry by the monetary authorities
Ho:
The failure if many bank in Nigeria in recent
time due to lack of
regulation and effective supervisor of the
banking industry by the monetary authorities.
1.5 SIGNIFICANCE
OF THE STUDY
This study will
from base for reference to any person who will work on a related study in
future.
This research
project will educate the public on the nature and consequence of various
banking regulation quid line and its effects on the banking industry and
the entire economy.
This research work
also show how tries regulation and its implementation had protected the
interest of the bank business community and the economy as the whole.
1.6 DEFINITION
OF TERM
1. BANKING
REGULATION/GUIDELINE: This
is seen as a body of specific by some government agreed behaviour either
imposed by some government within industry that units the activities and
business operation of financial institution Central Bank of Nigeria prudential
guidelines for licensed bank (1991)
2. PRUDENTIAL
REGULATION/ GUIDELINE: The ultimate justification for prudential
guideline in the recognition of credit risk and proving for writing of some to
avoid a false picture of the balanced sheet. This business practice
existing in the manufacturing sector and is necessary for measuring up to
accounting standards. The objectives of prudential regulation are therefore to
protect the microeconomics interests of the depositor and microeconomic
interest of financial system. Effect consideration is another justification for
prudential.
3.
NOW PERFORMANCES CREDIT: There are interest or principle due but not
paid for 90 days or more.
4. OPEN
MARKET OPERATION (OMO): On a weekly basis also he central bal of Nigeria
buy and sell treasury bills with a view to affecting the liquidity in the
system. Inventors are require to send their bids only to discounts houses which
will in turn bid both as agents for their own investment.
Maturity of bill sold at (OMO) are much less
than the 91day sold at the primary tender unlike the primary market (OMO)
allocation is based on a multiple rate acceptable to him for the applicable
maturity. Successful bids are those bids that come under the marginal
rate of the CBN’s stop rate for the particular auction.
5. DISCOUNT
RATE: This represents the cost of borrowing by commercial banks from
the central bank when they reserves in need of funds to replenish reserves in
order to create deposits (money) by extended loans to customers. Raising the
discount rate increase interest rates and cut down their lending investing
activities. Consequently the rise demand for bank loan by customers. The
lowering of the discount rate will have the opposite effect.
This ceteris Para bus the central bank can
discourage or encourage money creation by commercial banks simply by raising or
lowering the discount.
6. LIQUIDLY
RATIO: Banks must have enough funds to meet maturating obligation. As
such enough cash must be held to ensure that expected receipts appropriately
match the profit of cash flows Bank are required to have a minimum liquidly
ratio of 30 percent out of treasury securities treasury bill and
certification. The bank conducts equal check on each bank stock of
liquidity and analyses the liquid assets which includes eligible
envelopments stock (EDS) certificates of deposits (CDS) Treasury certificates,
treasury bill and commercials papers.
7. REQUIREMENTS
RESERVES OF FUND: These are the reserves of fund which the
commercial banks are hinder statutory or conventional obligation to hold
against their deposit liabilities. The exercise of control by the central
bank over these reserves is one method by which it can affect the commercial
bank to lend money to customers excess reserve i.e reserves over and above the
minimum required. Consequently the central bank can effetely control the
ability of the commercial bank to create money by simply varying their
reserves requirement for instance if tight money policy is desired the Central
Bank raises the reserved or liquidity ratio thereby forcing commercial bank to
curtail their lending operations. The opposite action by the Central Bank would
require an easy money in circulation.
Department | Banking and Finance |
Project ID Code | BFN0070 |
Chapters | 5 Chapters |
No of Pages | 85 pages |
Methodology | Chi Square |
Reference | YES |
Format | Microsoft Word |
Price | ₦4000, $15 |
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Contact Us On | +2347043069458 |