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Distress In Banking, Causes, Effects And Solutions
[A case study of Mainstreet bank]
CHAPTER ONE -- [Total Page(s) 2]
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1.3 SCOPE AND LIMITATION OF THE STUDY
The scope of this research work is distress in Nigeria banking industries while emphasis is laid on the causes, effects and solution. However Afribank plc, Ilorin branch, which has been a victim of distress banks in Nigeria was choosen as a case study to generalize for this research work.
Meanwhile, the following are the limitation factors envisaged in the course of study:
1. Inadequate time to thoroughly carryout study
2. Inadequate information for personal reason from the manager in such cases the data made available to us in what we made us of.
3. The assumption that the respondents interview express in truth objectivity.
1.4 HYPOTHESIS
i. That the mismanagement is the major cause of distress of bank.
ii. That inflationary pressure high and unstable exchange rate, frequent change in monetary policy, non compliance to banking regulations.
i. Is mismanagement the major causes of banks going distress in Nigeria?
ii. Can distress be attribute of other causes apart from mismanagement such as fraud?
iii. Does inability of banks to adapt to technological change such as computer installation causes distress?
iv. Does planning, which is a pre-determined objectives if not done by banks going distress?
v. In every many instance, the adjusted capital of most distress bank is negative to the extent that eve fixed asset could be seen to have been financed from depositors funds, can these lead to distress in banks?
vi. Does the ability of banks having clear investment or credit policy lead to such banks going distress?
1.5 ORGANIZATION AND PLAN OF THE STUDY
The paper is divided into five chapters, the first chapter deals with introduction and statement of the problems, the aims and objectives of study, and statement of the study, scope and limitation of the study.
Chapter two deals with historical background of banks with emphasis on commercial banks, the Nigeria financial system and its structure causes and effect of bank failure in Nigeria.
Chapter three deals with research approach, sources design a methodology, such as research approach, source of data, research instrument and method of investigation.
Chapter four deals with summary of result and decision on result findings.
Chapter five deals with the suggestion and recommendation on better banking transaction including the role of central bank of Nigeria and Nigeria deposit insurance corporation.
1.6 DEFINITION OF TERMS
NDIC: Nigeria Deposit Insurance Corporation Independent body acts as additional regulatory authority, in the supervision of banks to ensuring bank solvency decree 22 of 1988 establishes it.
DEPOSIT: deposit in these content means monies lodge by the general public with an insured bank or financial institution whether or not its keeping is for the purpose and earning or dividend, whether or not such money are payable upon demand, upon a given period of notice or upon a fixed date.
LIQUIDITY: an asset is said to be liquid if it can easily be converted into cash within a short period of time and without appreciate loss of value. The liquid assets is bank notes and coin (i.e. cash) however, it is barren because it is not capable of yielding any income unless it is invested.
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