The Cause Of Bank Failure And Its Effect On The Nigeria Economic Development

The Cause Of Bank Failure And Its Effect On The Nigeria Economic Development

Chapter One

Preface

Background Of The Study

marketable Banks are legal reality with perpetual race formed as a commercial body under law, by an association of person, Basil( 2001 1) according to companies and Allied matters Act 1990 section 29, companies are classified into three types

1. A private company limited by shares shall end with the word “ limited ”.( Ltd).

2. Public company limited by shares ends with the words “ public limited ”( plc)

3. Company limited by guarantees shall end with the words “ limited by Guarantee) ” in classes( ltd Gtc)

It’s grounded on these that we shall call to mind on the issues concerning fiscal associations. A fiscal institution is a business association and establishment, which deals with plutocrat and fiscal means similar as shares, bills of exchange, storeroom bills etc. Augustine( 200338).

fiscal institution are regarded as banks, which is comprised of central banks, marketable banks( known as common stock banks) and others. fiscal institutions don’t concentrate on banks as long but those institutions which pool or rally savings and redundant liquidity from individualities, enterprises, commercial bodiesetc.

It’s egregious for one to know that a country or an frugality can not stand without a proper banking system. Banks began from man’s question for store- keeping or safe keeping of wealth.

Background Of The Case Study( Ecobank)

Company’s profile of Ecobank

Ecobank Nigeria Plc, generally appertained to as Ecobank Nigeria, is a marketable bank in Nigeria. It’s one of the marketable banks certified by the central Bank of Nigeria the public banking controller. The bank was established in 1985 and began operations in 1986. It operates as a universal bank furnishing noncommercial, retail, commercial, investment and sale banking services to its guests in the Nigerian request. The bank divides its operations into three major divisions( a) Retail Banking( b) noncommercial banking and( c) Treasury and fiscal institutions. The bank also offers capital requests and investment banking services during the forth quarter of 2011. Ecobank Nigeria acquired 100of the shareholding in Ecobank, creating the expanded Ecobank NigeriaPlc.

Statement Of The Problem

The statement of the problem serves as the corner gravestone upon which the gross exploration plan is grounded, Baridam( 1993 22). It’s relatively satisfying that a “ sound banking system is a healthy frugality ”. As we’ve preliminarily bandied, there was an up ward trend in the failure of banks in the recent decades. A tendency, which however isn’t peculiar to Nigerians can stymie the frugality and affect the public negatively. This takes into consideration, the problems that are responsible for the banks which are as follows

1. Fraud

2. Unqualified operation staffing

3. inordinate overdraft installations to guests

4. Lack of provocation to workers( impulses).

5. redundant liquidityi.e total functional failures

While the failures ahs effect on the frugality at large, these are listed as follows;

Divestment After a banks failure, insecurity comes which throws investors off balance and for this reason, the investors will retreat or withhold their investments

ii. Demand deposit marketable banks collect this from guests with this agreement to pay interest to the individualities and there by making or creating their own interest or profit by advancing to borrowers fails to redeem the loans as when indeed though the banks had collected some collaterals from them( borrowers).

Ideal Of The Study

The main purpose or ideal of this exploration is

1. to conduct disquisition on the causes of bank failures

2. To know the effect of bank failures on companiesi.e( investors) in the frugality

3. To explore and reveal the colorful failures of banks

4. To proffer result and recommendations on the possible ways to break the problems of bank failures in all sectors of the Nigeria frugality

Exploration Questions

It’s clear that a bank can not fail without any shriek that means, that these are some other effects that must have contributed in the failure of similar associations which we anticipate from the repliers to highlights us on them in this design they are

i. What factors are responsible for bank failure in Nigeria?

ii. Does banks failure have any effect on the Nigeria frugality?

iii. What corrective measure could be taken to the effect of bank failures on Nigerian frugality?

iv. What are the likely goods of bank failure to the other sectors of the frugality?

v. What are the responses of the individualities and stake holder/ investors towards bank failure in Nigeria?

vi. How has bank torture affected the banking habit of the people in Nigeria?

Statement Of Exploration Suppositions

A thesis is a proposition that’s stated in testable form and vaticination of particular relationship between two or further variables.

Thesis

Ho There’s no relationship between bank fraud and profitable development

Hi There’s a strong relationship between bank fraud and profitable development

H0 there’s no strong relationship between poor bank fiscal operation and torture in the banking sector.

Hi Poor bank operation leads to frauds and torture in the banking sector