THE ROLE OF COMMERCIAL BANKS IN THE ECONOMIC DEVELOPMENT OF RURAL AREAS OF NIGERIA

The banking industry has undergone major upheaval in recent years, largely due to the lingering recessionary environment and increased regulatory environment. Many banks have failed in the face of such tough environmental conditions. These conditions

In the document is also said that even when people have money in that bank people would go to the bank and go get their money since that bank was going to be a failed and it also said that after their failure the repressive effect on the spending of its clients. They couldn’t do anything to help the bank to crash even though they will all be crashed any day.

Extensive research has determined that the banking industry is in an unstable state. The industry’s profits have

Deregulation, innovation and globalisation has changed the way banks run from asset management to liability management, as well as the change from ‘mono’ to ‘multi-tasking’ and the increased competition in the sector as well as risk. The banking system has evolved drastically from the traditional mono-tasking institution to what it is now. This change in roles of asset and liability management could be one of the main reasons behind the global

“ Concentration has made the financial sector more fragile by creating a few large institutions that dominate more than half of the sector. The top 18 banks currently hold about 60 percent of total assets with the top 4 holding about 40 percent (this is even higher than pre-crisis levels)—compared with only 23 percent of total bank assets in 1992. Further, as compared with 1992, these are now “universal banks,” permitted to engage in a wide range of financial activities, from commercial banking to investment banking and to insurance.

The growth rate of Nigeria remained low in the late 90’s through the early 2000’s. In 2003, it climbed to over Ten percent and in 2004 soared to almost Thirty-Four percent. Since that time, it has relatively stabilized and currently stands at 4.18% with an annual growth rate of 6.54%. One of the fastest growing segments is Information and Communication, which account for about 10 percent of the total output. The country’s inflation rate has declined recently after a period of increases and currently stands at 8.3 % (TRADING ECONOMICS, 2014).

Even though the GDP per capita is increasing every year, the effects of price inflation compounded with higher interest rates than other competing markets have put the citizens in a severe state of poverty. According to (The World Factbook: Nigeria), Over 62% of the total population is below the poverty line. This is due to increased cost of living and increased interest rates on borrowing. The growth will soon slow

❖ To assess the performance of the banking sector before and after dollarization. ❖ To

As discussed earlier, research on the internationalisation of Nigerian firm’s is still under-explored and scant in the literature. In fact, few studies have research internationalisation phenomenon have studied it on the perspective of the banking sector (Amungo in Adeleye, White, & Boso, 2016, pp. 69-91), “examining the factors influencing the international expansion of Nigerian banks” finds that Nigerian banks internationalisation is influenced by home country regulations and the domestic competitive pressure, managerial intentionality and risk diversification. Similarly, Boojihawon and Acholonu (2013) on the study of “the internationalisation of African banks” shows that the consolidation and recapitalization program in the banking sector 2004 motives Nigerian banks embark on foreign expansion. This is an indication that SSA firms deserves a focus in the international business research, because of the region diversity in terms of resources, political systems, cultural diversity and economic structures (Initiative for Global Development and Dalberg Global Development, 2011).

… actually when the shareholder 's fund of Nigerian banks moved to N25 billion... we also embark on recapitalisation moving our shareholders from 2 billion to 25 billion and in the process too, we also acquired another bank… to join us to also increase not just beyond our capital base but also increase our network as we tried to emerge as a leading retail bank in Nigeria (Beta_g2 December 2015)

With every new govt. banking sector gets new policies for its operation. Thus it has to cope with the changing principles

In the aftermath of the economic recession which pulled down many global banks and exposed multiple weaknesses in regulation and banking structures, the Basel Committee on Banking Supervision agreed to new rules on the minimum level (capital ratio) and composite structure of Banks capital on the 12th of September, 2010. Broadly speaking, the new rules which are widely referred to as Basel III (and are mainly Basel II plus new regulations based on lessons from the market crisis), still stipulate a minimum Total Capital Ratio of 8%. However, in addition to increasing the portion of the 8% requirement that is Core Tier 1 Capital (from 2% to

Today, its vital role in commercial banking activities lie in the direct effect it has on total economic growth and business development. Every year the (CBN) central bank of Nigeria being the monetary authority that is solely responsible for the insurance of guidelines policies and the interpretation of such, comes up with economic measure roles and regulation under which the bank in the country operate. Such policies direct the use of funds from depositors, stockholders, and creditors in order to control the size of loan portfolio thereby determining the general circumstances under which it is appropriate to make an advance. The monetary policies also aim at aiding the banks to maintain a sound financial and banking system promote confidence in sustenance of reasonable banking services for public as well as ensuring a high standard of conduct and professionalism in banking industry. These rules and regulations are contained in monetary policy circular being issued by the central bank at the beginning of every year.

During the major review of our bank operations, main office has found out a lot of problems. Agne, maybe you can introduce to us the conclusions.

The economy can be divided in the entire spectrum of economic activity into the real and monetary sectors. The real sector is where production takes place while the monetary sector supports this production and in a way is the means to the end. We know and we accept the financial system is critical to the working of the rest of the economy. In fact, the Asian crisis of the nineties, or for that matter what happened in Latin America and Russia subsequently and also Dubai Crisis have shown how a fragile financial sector can wreak havoc on the rest of the economy. Therefore the banking sector is crucial and we want to express our views to explore how this sector can work in harmony with the real sector to achieve the