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Full Project – Effect of CBN supervision and examination on commercial bank operations

Full Project – Effect of CBN supervision and examination on commercial bank operations

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Full Project – Effect of CBN supervision and examination on commercial bank operations

Click here to Get this Complete Project Chapter 1-5

CHAPTER ONE

 

  • Background of the Study

The growth and development of international trade along the West African countries played a major role in extending the medium of exchange beyond trade by barter in the nineteenth century. The “native currency” system which relied on items such countries, manila, brass and copper rods, had to accommodate foreign currencies such as Maria Theresa Dollar and British West African Silver Coins.

Increase in trade motivated the setting up of the Bank of British West Africa (BBWA) in 1884, thereby drastically reducing the barter system and ushering in a rudimentary form of commercial banking. The issue of legal lender currency for West African region was nowhere differed till 1912, when the West African Currency Board (WACB) was established. The WACB was an offshoot of the recommendation of the emote committee setup the secretary of the state, the Re. Hon. Lewis Harcourt. The WACB retained the services of the BBWA as its four currency centres in Lagos (Nigeria), Accra (Ghana), Freetown (Sierra Lone) and Bart Hurst, New Banjul (the Gambia). The currency in circulation in West Africa increased steadily through the 1950’s in response to the tailoring demand and increases in the world prices for West African primary products such as cocoa, groundnut and palm oil.

The WACB however did not have discretionary control over the money stock of the territories under its sphere of influence. It was setup primary to promote the financial export trader specifically; it was charged with the issue of a West African currency, the exchange of existing currencies and investment of reserves. There was a fixed party between the local currency and the British Pounds while the currency, had 100 percent sterling backing. The reserves were invested in Britain and this in a way facilitated Nigeria’s international payments. As the WACH was automatically linked to the British system, the investment policy was rather conservative in the sense that the sterling reserves were invested only in Britain. In order to eliminate deficiency and promote the growth of the domestic money and capital markets, especially as the country marched towards political independency in 1960, the Central Bank of Nigeria Act of 1958 established the CBN. The Bank commenced business in July 1959 with an initial capital equivalent of N3.0 million.

  • Statement of the Problem

This research is centered in the effect of the supervision and examination of commercial banks operation. Bank regulation supervision is implemented to ensure a sound and safe financial system in the economy. The measures are mainly concerned with quality of risk asset in banks compliance with key ratios, such as liquidity ratio, cash reserve ratio, capital adequacy ratio among others, the quality of management and other corporate government issues.

However, inadequate supervisory framework and lack of an effective risk asset data base and information sharing system have contributed to small measure in disputing the activities of banks thereby leading to the often distasteful incidents of the banking distress and liquidation by the regulations. In line with this problem, various banking acts have been promulgated as well as the introduction of different strategies all aimed at increasing the efficiency of banking system regulatory supervision. Among them are no site, off site banking examination, special examination called at the instance of regulators as well as other methods of surveillance to be mutually reinforcing and are designed to timely identify and diagnose emerging problems in individual banks with a view to presenting most efficient resolution directed towards ensuring continued public confidence in the banking system.

  • Statement of Objective

The objectives of the study are as follows:

  1. To highlight the various legal, economic, social, cultural and political problems associated with the banking supervision in Nigeria.
  2. To study and device strategies for streaming bank regulations and supervision in Nigeria banking.
  3. To investigate the effect of modern technology in bank supervision, examination and regulation.
  4. To highlight some of bank supervision and examination tools used by CBN.
  5. To examine the general effect of CBN supervision and examination and commercial bank operation.

 

  • Research Questions
  1. How does the CBN intend to speed up with commercial banks?
  2. What is the effect of CBN supervision to commercial banks?
  3. How does the CBN protect commercial banks depositors against loss?
  4. Why is it mandatory for banks to be overtly regulated by CBN?
  5. How effective has the CBN being as regulatory/supervisory authorities?
  6. Have the activities of banking supervisions brought about normal banking practice, professionalism and ethical conduct in the Nigeria banking system?
    • Needs and Significance of the Study

The needs and significance of this study is basically in the following:

  1. It will provide managers, professional bankers, scholars and the general seekers of knowledge with a ready source of information in the field of bank supervision and examination.
  2. It will improve the understanding of the roles of regulatory body in Nigeria banking sectors.
  3. It is an empirical effort directed toward evaluating the performance of the regulatory body in the sector.
  4. The finding of this study will help to put aside the inefficient and ineffective banking laws and guideline in Nigeria.

 

  • Limitations and Delimitation of the Study

Normally a study of this nature will be tailored to obtain or rather attain some specific objectives. Thus, the study has a definite slope; the nature of bank supervision, examination and its effect on commercial bank operations is such that the functions is relevant to all banking business organization.

However, this study is only concerned with the effect of CBN’s bank supervision and examination on commercial banks in Nigeria. The limitations of this study are problems of time and finance. The stipulated time for the completion and submission of this project was very short. Also, academic programmes such as going for lectures and others; preparation for examination and writing of test crashed with the writing of this project; all these points contributed to the limitation of this writing of this study.

  • Definition of Terms

An attempt has been made to explain some terms used in this study. They are as follows:

  • Rudimentary: this is the dealing of the most basic or essential facts of a particular subject.
  • Off shoot: this can be defined as a thing that develops from something, especially a small organization that develops from larger ones.
  • Streamlining: this can be defined as a way to make a system, organization work better especially in a way that saves money.
  • Supervision: this is to be in charge of somebody or something and make sure that everything is done correctly and safely.
  • Examination: this is the act of looking at or considering something very carefully.
  • Framework: this is a set of ideas of rules that is used as the basis for making judgments decision.

 

 

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Full Project – Effect of CBN supervision and examination on commercial bank operations

Click here to Get The Complete Research Project Chapter 1-5

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