THE PROBLEM FACING COMMERCIAL BANKS IN NIGERIA (A CASE STUDY OF UNION BANKS OF NIGERIA UNITED BANKS FOR AFRICAN AND AFRICAN BANK

ABSTRACT

Commercial banks in Nigeria have been facing a of problem. These problem ranges from integrity factors location factor technological factor unstable management incompleteness of board members and unqualified personnel.

Therefore this study was aimed at looking into these problems so as to ascertain the impact on commercial banks as well as suggesting the possible ways of eliminating these problems. The researcher used three commercial banks for effective analysis namely union bank of Nigeria united bank of African and Africa bank.

In order to be arrive at a conclusion decision interviews literature review and personal observation were employed as the means of data collection. The three banks used were fund to be having almost the same basic problems even though some were bigger bank than others mismanagement politician instability and government interference in the daily affairs of banks were seen as problem to all commercial banks.

By way conclusion suggestion on how these problems can be prevented in the future were made.  One of these suggestions is by including professional who are competent in the field of banking.  Another is that government should minimize its interference in he activities of the commercial banks

CHAPTER ONE

INTRODUCTION

 The problems of commercial banks in Nigeria is the topic of this research project. Some commercial banks in Nigeria are owned by government some by individual and other by a combination of both the government and individuals.  Individuals establish banks for the purpose of making profit and to initiate business opportunity where they are available.  Organizations on he other hand establish banks for profit making and probably to and business governments establish banks merely for development purpose.

In recent time it has been the vogue for banks to be ridiculed and criticized for one reason or the other.  These criticisms have emanated both from official and unofficial quarters and now tend towards a climax.

Commercial banks in Nigeria and other countries are established to carry out the following functions it deals in money and financial service provide efficient system for making payment to settle business and personal transaction provide safekeeping for customers money and valuables provide funds for production or consumers need convention of funds into assets.

The Central Bank of Nigeria (CNB) is the apex bank. It performs the major role of monetary management through the issuance of annual monetary policy circular to banks.

So commercial banks are faced with problems because the polices from the CBN are not always carefully through out. These failures are due to the fact that the right questions, to problems of banks are matter asked nor right answers obtained. Some people attributed the problem of banks to their inability to match funds. In other words the banks refuse to marry the duration for which deposits are placed with them with the duration from which they place funds with other banks. Other argues that some of the banks reduce the portfolio of loan and advance while increasing investment.

All these allegation leveled on these banks come from the management teams of banks in Nigeria. The problems of commercial banks were formerly attributed to a regulatory body like central bank of Nigeria (CBN) in experienced personnel and inadequate capital base were also of the problem. In recent time we have a regulatory body (CBN) finance house experience in the society but still management teams and board of directors cause major problems in banking sector.

Banks face other problems such as integrity factor location factor and technological factor among other.  There also exist conflict of objective in the commercial banks. He political instability and the global economic recess affected the commercial banks negatively.

STATEMENT OF THE PROBLEM

In Nigeria today the incidence of distress in the banking sector is not more surprise news to the general public. The causes and the factors responsible for the distress are numerous. Every body tries to clip in this own ideal of the causes of the malaise in banking but there has never been a solution to the problem.  This research therefore tends to find out the factors responsible for the problem in Nigeria commercial bank. This paper is aimed at identifying the problems associated with commercial banks using united banks for Africa (UBA) and African bank. The paper will find out how he board of director with the management team brings problem to banks as well a he effect of integrity location and technological factors and government interference on bank.