THE EFFECT OF BAD AND DOUBTFUL DEBT ON THE LIQUIDITY OF AN ORGANIZATION (A CASE STUDY OF UNION BANK PLC)
2,321 marked this research material reliable.
Call or whatsapp: +2347063298784 or email: info@allprojectmaterials.com
THE EFFECT OF BAD AND DOUBTFUL DEBT ON THE LIQUIDITY OF AN ORGANIZATION (A CASE STUDY OF UNION BANK PLC)
THE EFFECT OF BAD AND DOUBTFUL DEBT ON THE LIQUIDITY OF AN ORGANIZATION (A CASE STUDY OF UNION BANK PLC)The word
“bad and doubtful debt” is used in the banking to refer to the portion
of loans, advances and over drafts granted by bank which has proved
difficult and seemingly impossible to recover in full from the
respective committed customer. Such debt do not emerge instantaneously
but rather are a gradual result of “lending errors” by lending officers
and subsequent improper administrative handling of the facilities among
other factors. The commercial banks are in the services industry. They
are aimed at providing financial assistance to individuals and corporate
bodies without underplaying the importance of profitability to the
shareholders and deposits alike. A bank is therefore expected to ensure
that sufficient liquidity of funds meet cash demand by its customer at
short notices. This in addition to maintaining sufficient profitability
hold through proper and efficient management. A business has two basic
source of capital:
- Owner’s Capital: That is equity
contributed by shareholders (including retained earnings) which is
essentially used for he purchase of the initial assets of the business
and its initial working capital.
- Borrowed Funds: Which refers to external
fund required and injected into the business by management subject to
the articles and memoranda of Association. It is here that the
commercial bank play an important role by granting long and short term
loans and advances. It is in the process of granting those loans
facilities that error occurs. Losses resulting from such errors will be
the focus of this research.
Through the proper use of interest rate banks are able to attract
depositors of various terms. Such depositors include, short term
deposits ranging from 7 days to 6 months, long term, deposits current
account. This is regarded as special borrowing by the bank since the
bank of any purpose(s) could use any deposits without recourse to the
depositors, and such depositors are only payable on demand or at any
agreed date. It is these depositors, which provide the basis for banks
lending to various customers. This is subject of the reserve ratio set
by the central bank of Nigeria (CBN). The interest rates charged on
loans by banks are usually higher than the rates they pay on deposit and
are determined by the federal government. It was the interest rates
chargeable and payable on loans facilities and deposits respectively.
The numbers of volume of good loan and advance seriously determine the
degree of profitable commercial banks. Consequently, profitable
commercial banks have to limit or eliminate the number of bad account in
their lending portfolio. It is necessary to note that all funds tied up
in bad and doubtful account are not accountable for further onward
lending. Also, with the advent of CBN prudential guidelines, non
performing loans and advances who interest have been outstanding on
these account are not reflected in the earnings of commercial bank, but
charged to interest suspense and charged income when realized. Bad debt
regarded as negative contributors to the profitability of commercial
banks. So banks should be expected to be the most relevant to provide
for bad debts unless it is unavoidable.
Another dimension however is that critics are quick in pointing out
that the high bad or doubtful debts figures in final accounts of
commercial banks could be realistic. It is also alleged that banks could
use such provision to evade tax. It also demonstrate the incompetence
of the lending bankers in the management of loan able funds on the other
hand, it is held that this provisions shows the level of convenience by
the bank officer system. This views was expressed by the president of
Association of Shareholders of Wema Bank, Mr. Akintunde Asaw. He alleged
that some of the official of Wema Bank acted outside the specified
authority and scheduled by irregularly approving loans. He therefore
gave the bank up to 1990 to recover all irregular loans while assuring
that those involved “regular disbursement” of shareholders would be
punished.
The final accounts is of most commercial banks in Nigeria have
provisions for bad and doubtful debts of various figures while the funds
of the level of such provisions id decreasing in the case of some
commercial banks for other, it is increasing. This reflected in the
comments made by the Chairman of the Board Directors of such commercial
banks. In the case of the Bank of the North provision for bad and
doubtful debts were N6.8 million (1993), N6.7 million (1994) and N213.5
million (1995). This shows an increasing trend from 1992 to 1995, which
may not be connected with the allegation of the President of
shareholders of Wema Bank.
The view of the provisions for bad and doubtful debts by banks in the
country has necessitated on in-depth study into the fundamental factors
for such losses by the bank. Consequently, the fundamental objective of
this study is to identify the causes of bad and doubtful debts and
controls been employed by banks to minimize or eliminate such debts. In
so doing, we will be able to establish the efficiency of the control
otherwise in the banks lending system. Consequently, appropriate
recommendations could be made for improvement.
THE EFFECT OF BAD AND DOUBTFUL DEBT ON THE LIQUIDITY OF AN ORGANIZATION (A CASE STUDY OF UNION BANK PLC)
Additional Information
- The Project Material is available for download.
- The Research material is delivered within 15-30 Minutes.
- The Material is complete from Preliminary Pages to References.
- Well Researched and Approved for supervision.
- Click the download button below to get the complete project material.
Frequently Asked Questions
In-order to give you the best service available online, we have compiled frequently asked questions (FAQ) from our clients so as to answer them and make your visit much more interesting.
We are proudly Nigerians, and we are well aware of fraudulent activities that has been ongoing in the internet. To make it well known to our customers, we are geniune and duely registered with the Corporate Affairs Commission of the republic of Nigeria. Remember, Fraudulent sites can NEVER post bank accounts or contact address which contains personal information. Free chapter One is always given on the site to prove to you that we have the material. If you are unable to view the free chapter 1 send an email to
info@researchcub.info with the subject head "FREE CHAPTER 1' plus the topic. You will get a free chapter 1 within an hour. You can also
check out what our happy clients have to say.
Students are always advised to use our materials as guide. However, if you have a different case study, you may need to consult one of our professional writers to help you with that. Depending on similarity of the organization/industry you may modify if you wish.
We have professional writers in various disciplines. If you have a fresh topic, just click
Hire a Writer or click here to fill the form and one of our writers will contact you shortly.
Yes it is a complete research project. We ensure that our client receives complete project materials which includes chapters 1-5, full references, questionnaires/secondary data, etc.
Depending on how fast your request is acknowledged by us, you will get the complete project material withing 15-30 minutes. However, on a very good day you can still get it within 5 minutes!
What Clients Say
Our Researchers are happy, see what they are saying. Share your own experience with the world.
Be polite and honest, as we seek to expand our business and reach more people. Thank you.
Patrick
Student
All Project Materials is a website I recommend to all student and researchers within and outside the country. The web owners are doing great job and I appreciate them for that. Once again welldone.
Keneth
Student
Thank you for everything you have done so far; my communication with you, both by e-mail and whatsapp, has been the only positive point about the whole experience - you have been reliable and courteous in my research work and I sincerely appreciate that.
Mike Olan
Student
You are well rated. Thank you for your being prompt and activeness.
Adedayo
Student
I have been using you people for some time and I can say that you are good because you give me what I want, you don't disappoint. You guys to keep to the standard. You are highly recommended to serve more Researchers.
Ndubuisi
Student
I love all project materials / researchcub.
There are good and wonderful. Nice Work!
People also search for:
the effect of bad and doubtful debt on the liquidity of an organization (a case study of union bank plc), effect, doubtful, debt project topics, researchcub.info, project topic, list of project topics, project topics and materials, research project topics, covid-19 project materials, all project topics, journals, books, Academic writer, accounting project topics.
A Research proposal for the effect of bad and doubtful debt on the liquidity of an organization (a case study of union bank plc):
Reviews: A Review on the effect of bad and doubtful debt on the liquidity of an organization (a case study of union bank plc), effect, doubtful, debt project topics, researchcub.info, project topic, list of project topics, research project topics, journals, books, Academic writer.
The word “bad and doubtful debt” is used in the banking to refer to the portion of loans, advances and over drafts granted by bank which has proved difficult and seemingly impossible to recover in full from the respective committed customer. Such debt do not emerge instantaneously but rather are a gradual result of “lending errors” by lending officers and subsequent improper administrative handling of the facilities among other factors. The commercial banks are in the services industry. They are aimed at providing financial assistance to individuals and corporate bodies without underplaying the importance of profitability to the shareholders and deposits alike. A bank is therefore expected to ensure that sufficient liquidity of funds meet cash demand by its customer at short notices. This in addition to maintaining sufficient profitability hold through proper and efficient management... accounting project topics
THE EFFECT OF BAD AND DOUBTFUL DEBT ON THE LIQUIDITY OF AN ORGANIZATION (A CASE STUDY OF UNION BANK PLC)