ABSTRACT
This study was designed
with the aim of appraising the roles of CBN/NDIC in the management and
regulation of commercial banks activities.
In order to actualize
the objectives, five banks as sample were selected/chosen for analysis to
assess financial institutions performance in relation to the regulatory
authorities, CBN and NDIC. Various literature and theoretical issues were
discussed. In addition an empirical regression and descriptive analysis was
carried out to investigate how CBN/NDIC regulation variables impact on
commercial banks’ activities in Nigeria. The findings from both analysis
revealed that CBN structure, CBN/NDIC performance and their relationship with
commercial banks had a significant impact on the management and regulation of
commercial banks’ activities in Nigerian. While depositors’ protection was the
only variable that had an insignificant impact on the management and regulation
of commercial banks’ activities. With the aid of regression, the research was
able to establish that CBN and NDIC make significant impact in commercial
banking sector.
It is
recommendation that continuous review of prudential guidelines and regulations
in the light of dynamics of operating environment for commercial banks as well
as enforcement of regulation and compliance with prudential guidelines and
regulations to reduce the systematic effects and prevent deterioration in the
financial condition of distressed institutions.
TABLE OF
CONTENT
Title Page
Abstract
CHAPTER ONE
1.1 Introduction
1.2
Statement of Problems/Questions
1.3
Statement of Objective
1.4
Statement of Hypotheses
1.5
Significance/Regulation of the Study
1.6
Scope of the
Study
1.7
Limitation of the Study
1.8
Definition of Terms
References
CHAPTER TWO: LITERATURE
REVIEW
2.0
Introduction
2.1
Banking Regulation Defined
2.2
Rationale for Banking Regulation
2.3
How the CBN Regulates Banks
2.4
Banks’ Regulation
2.5 How the Nigerian Deposit
Insurance
Corporation Regulates Banks
2.6 CBN Monitory and Credit
Policy Concept,
Administration and Guidelines
2.7 The Practice of Banking
Regulation in Nigeria
2.8 How Has the Banking
Industry Performed
Under Regulation
2.9
Structure of Commercial Bank
2.10 Regulatory/Supervisory Framework for
Asset/Liability Management
2.10 The Establishment of
an Asset/Liability Management
of Committee (Policies
Guidelines)
2.11 Increased
Supervisory Responsibilities of
Central Bank of Nigeria
2.13 Core Principle for Effective Banking
Supervision:
The Basle Committee Guidelines
2.14 A Review of Actions Taken By CBN/NDIC
to
Tackle Distress in Commercial Banks
2.15 Summary of
Resolution Option Implemented by
CBN and NDIC
References
CHAPTER THREE:
METHODOLOGY
4.1 Introduction
4.2 Research
Design
4.3 Population
and Sample
4.4 Sampling
Procedure
4.5 Source
of
Data
4.6 Research
Instrument
4.7 Theoretical
Framework
4.8 Model
Specification
4.9 Data
Presentation and Analysis
References
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
5 Descriptive
Analysis
4.1
Inferential Analysis
4.2
Hypothesis
Testing
References
CHAPTER
FIVE: SUMMARY OF
FINDINGS, RECOMMENDATION AND CONCLUSION
1.1 Introduction
1.2 Summary
of Findings
1.3 Policy
Implication of Findings
1.4 Recommendation
5.4
Conclusion
Bibliography
Appendix
CHAPTER ONE
1.1 INTRODUCTION
Commercial banks are
generally all-purpose retail bankers, Ajayi (1991). They mobilize deposits of
all sizes and from all and sundry in retail as well as in wholesale markets.
They engage mainly in borrowing and lending activities. The lending activities
of Nigerian commercial banks have been increasing steadily over the years and
recently, the pace of increase has acquired a tempo that needs some
explanation.
Management of banks is
the process of managing money and providing a whole gamut of banking services.
Beginning with the management itself, it involves finding the optimal size and
composition of banks overall assets and liabilities, Nwankwo (1991).
An essential feature of
a good financial system in the banking industry is the existence and
implementation of a well developed and cleared defined set of rules,
regulations, enforcement of sanction in case of contravention. Since several
developments in the Nigeria economy had necessitated major review of the
existing rules, regulations and laws. Consequently, the CBN No. 25 of 1991 (as
amended) was promulgated to give CBN wider powers to handle all issues relating
to banks from licensing to liquidation.
Further development and
needs to sanitize the system brought about the promulgation of CBN 1997 decree
to amend the existing ones. The 1997 decree was to regulate other areas of
Nigeria financial system with CBN assuming control of banks, thus a comprehensive
framework for more effective supervision and optimal resolution of problems of
distressed finance commenced in 1995. In this regard, the CBN has been taken
over the operations of some banks, revoked the licenses of others and appointed
the NDIC as a receiver and liquidator of some of these banks.
But over the years, the
regulatory authorities have not performing their role creditably. They are not
even functioning effectively because enabling environment is not prevalent.
Prior to 1988 there was no institution to insure the depositors’ fund and as a
result of the accelerated expansion of banking sector the need to insure
depositors’ fund became more obvious. The Nigeria Deposit Insurance Corporation
was thus established by Decree 22 of June 1988 to provide insurance cover for
depositors’ fund and complement the supervisory role of CBN. Currently all
institutions licensed as banks by the CBN are covered by depositors’ protection
scheme.
A committee comprising
representative of banking supervisions and bank examination department of CBN
and NDIC was thereafter set up to draw up guidelines to assist banks examining
in managing financial institutions.
To this end, this
research is an attempt among others to examine management and regulation of
commercial banks activities in Nigeria in order to determine their concreteness
and paradigm.
1.2 STATEMENT
OF PROBLEMS/QUESTIONS
The problem of this
study focuses on the importance of managing and regulating commercial banks
activities. To appraise the role of CBN and NDIC in the regulation of banking
system in Nigeria, the following research questions are stated for
consideration.
(1) Have
the regulatory authorities, CBN and NDIC been performing their role creditably?
(2) What
impact has the structure of the authorities had on the functions?
(3) Would
the regulatory authorities have functioned effectively if enabling environment
were prevalent?
(4) How
does the CBN protect commercial banks depositors against loss?
(5) How
does NDIC protect commercial banks depositors against loss?
(6) How
effective has the CBN and NDIC being as regulatory/supervisory authorities?
1.3 STATEMENT
OF OBJECTIVE
The objective of this
study is to make a comprehensive examination of the regulation of commercial
banks activities. One of the main functions of commercial banks is to provide
short-term and medium term loans and advances to various sectors of the
economy. It is therefore obvious that its activities do not constitute any
obstacle towards the realization of the objectives in regulating commercial
banks of the Nigeria economy. In view of the above, the specific objectives of
the study include;
(1) To
find out how the regulatory authorities, CBN and NDIC have been performing
their role creditably.
(2) To
ascertain the impact of the authorities had on their functions.
(3) To
identify the various functions of the regulatory authorities.
(4) To
ascertain the CBN protection on commercial bank depositors against loss.
(5) To
ascertain the NDIC protection on commercial bank depositors against loss.
(6) To
evaluate the effectiveness of CBN and NDIC.
(7) To
appraise and make adequate recommendation on findings.
It is my belief that the
project will be of much importance to the public to know the reasons why
commercial banks in Nigeria always experience problems due to mismanagement and
inadequate regulation.
1.4 STATEMENT
OF HYPOTHESES
For the purpose of resolving
the research problems and questions articulated above, the following hypotheses
were formulated and tested in the course of this study;
H0: CBN/NDIC have not
performed their roles in line with the enabling Acts establishing them.
H1: CBN/NDIC have
performed their roles in line with the enabling Acts establishing them.
H0: CBN/NDIC structures
have no positive relationship with how well they perform their functions.
H1: CBN/NDIC structures
have positive relationship with how well they perform their functions.
H0: Regulatory Acts of CBN/NDIC and
BOFIA have not assisted to protect the depositors against losses of fund.
H1: Regulatory Acts of
CBN/NDIC and BOFIA have assisted to protect the depositors against losses
of fund.
1.5 SIGNIFICANCE/REGULATION
OF THE STUDY
To analyze the
management and regulation of commercial banks activities, we need to consider
the role of CBN and NDIC in the regulations of the banking system in Nigeria
and how the banking industry has performed under regulation and how does it
benefit;
(1) Government: It
is expected that the findings of this research will be very useful to the
government in managing and regulating commercial banks activities.
(2) Investors
in the Financial Services Industry: Investors especially entrepreneurs
who wish to establish and run their own financial institution may find this
work useful.
(3) The
Banking Public: This research will be useful to depositors who
patronize financial institutions and commit their funds into these
institutions.
(4) Future
Researcher: People who wish to carry out further research in this area
will certainly find this work relevant.
Department | Banking and Finance |
Project ID Code | BFN0277 |
Chapters | 5 Chapters |
No of Pages | 107 pages |
Methodology | Null |
Reference | YES |
Format | Microsoft Word |
Price | ₦4000, $15 |
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Contact Us On | +2348039638328 |
Contact Us On | +2347026816414 |
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