The Effect Of Bank Regulation On Stability Of Nigeria Banking System

The Effect Of Bank Regulation On Stability Of Nigeria Banking System

Chapter One

Preface

Background Of The Study

Indeed since the commencement of the first three successful indigenous banks in Nigeria, the National Bank of Nigeria established on February 11th 1933, the Agbommagbe Bank( now wema Bank Nig Plc) in 1945, The African international Bank Plc in 1947 and others latterly established in the country during the period from 1952 when the first banking constitution was legislated to regulate and control the conditioning of marketable banks in the country till present day, prand have married a endless point in our banking assiduity.

During the free banking period( between 1892 and 1952) there was no form of banking act or constitution to regulate the stabilities payload and operation of marketable bank. There are as it’s presently supervised. numerous bank were registered. Some of didn’t open their doors for business ever for a day while some simply collected guests deposits and varnished. This had redounded to the privation of our frugality an as a whole the important requirements fund for development and depriving individual the hard earned finances, this also brought about loss of faith trust on the marketable banks by Nigeria and the posterior under advanced banking habit in the country

still, with the preface of the first banking constitution in 1952 and the central bank of Nigeria( CBN) constitution in 1958 to regulate and control the conditioning of marketable banking in the country fraud in marketable banks have rather increased in size, and system used by fraudster acquires lesser complication day by day. Presently with the preface or ultramodern banking procedures ie bettered communication system, automatic electronic widgets and computers networks into our banking system coupled with colorful preventative measures taken by banks. To help fraud in the banks fraud have rather taken unclear dimension and the six and form involved increase in a geometric progression. Other Amptiam in his papers handicap o growth of incinerating assiduity saw that it was discovered during disquisition that bank now take redundant palladium before clearing a cheque because of rampant incident of fraud and phonies the form of fraud has placed banks loss on the normal of# 1m per each working day of the time in Nigeria Asimi kola in his own composition “ The cash frugality miracle ” also observed that fraud has come sophisticated as to make forget cheque book good the proprietor to confirm it as his own hand lately in the shot check the grand fraud, CBN issued a directive to bank to increase it capital base to# 25 billion. preliminarily section a of the decree 1990 state that, the minimal paid up capital for bank is# 50 million for marketable bank. This directive come up after several bank has been discovered to have defrauded it’s guests substantially foreign investors. In this needed.

Bankers in a shot to reduce the size and rapid-fire circumstance of fraud in their bank now take acceptable preventative measure before clearing cheques drawn their guests accounts. These preventative measures bring into focus another problem facing marketable banks,. The problem of time destruction in the banking hall. Ashimi Kola in his composition also said that client waits a minimum of about two hours in banking hall of Nigeria banks to cash their plutocrat. This is one of the most licit examens of the quality of bank services. The checking process is long and by the time a cheque is released to cashier for payment, the client is frustrated and maybe Rast asleep among feering crowd. This calls for an overhaul of the checking and control system. E above being the general situation of effects in marketable banking fraud is there frontward number one adversary to all concerned with growth and development ofbanks., the intention of this exploration work thus aimed at identification of the fraud on Nigerian frugality in general and on Afribank Nigeria plc Enugu in particular and recommend more functional measure that will help in the forestallment and to reduction of fraud in marketable bank in Nigeria