CHAPTER ONE

1.0   INTRODUCTION

In July 2004, the new governor of the central bank of Nigeria (CBN), professor Charles Soludo announced that the new minimum capitalization for bank in Nigeria is N25 billion (approximately) all bank are expected to comply by this direction by December 2005.

This announcement struck the banking section like a storm on a dark night. And its has left in its wake a heated debate on its appropriateness in relation to Nigeria banks and the current state of the economy. It is undeniable that this announcement brought with it a number of consequences.

As a result of the central bank of Nigeria (CBN) policy, banks across the nation have to strive for survival. Along the way, some banks liquidated, while some were acquired and others got merged.

Banking as a discipline and a profession has assumed a multi-skilled dimension due to its perceived dynamism in the word economic and social development.

In Nigeria, first bank ordinance was enacted in 1952 this to part an end to the mass features of banks witnessed between 1892 when African banking corporation (now first bank Nigeria) debated as the first established banking industry has become the most regulated sector  despite the much – vaunted deregulation now prevalent in many countries of the word and Nigeria inclusion.

The intercontinental bank plc is our focus under this study.

1.1   BACKGROUND OF THE STUDY:

Given the magnitude of banks problems which confronted Nigeria banking industries especially since the early 1990s, stagnant banks growth inadequate cash to meet their current obligation, giving loan to uncertified persons, militating the right of their customers (interest) and not fiduciary in managing the affairs of their customers, the importance of banking industries reform become paramount.

Therefore, there was need to remove policy distortion which had stalled banks progress. In particular, policy makers began to recognition more visibly the adverse effect of exclusive reliance in the set of policy instrument being enforced through cumbersome administrative control and regulation. It was rightly considered that failure to initiate reforms which would stress deregulation. If existing policy instrument would seriously jeopardize the long term growth and development prospects of Nigeria banks

Bank deregulation which involves appropriate realignment in capital structure, management, factors determine granting of the  public and interest rate on loan policies (Base lending rate) was viewed as a tool for reducing undue Nigeria intervention in banking activities and providing relevant structure of incentives that would put the banking industries on the path of recovery and growth.

1.2   STATEMENT OF THE PROBLEM

The problem of this study is that despite deregulation in banking sector, banking in Nigeria are still to ascertain some objective of the deregulation, like levity handling of affairs of their customer, giving loan to uncertified person automated teller machine fraudulent act (ATM) and how there will be talked with aim of develop Nigeria economy. Hence, the watch word of this study is to pinpoint the factors that initiating the hall mark of the deregulation in banking industries not yet to be achieve.

1.3   RESEARCH QUESTION

For the purpose of this study five (5) hypothesis are stated and tested.

1. Is it the aims of deregulation in banking industry is to develop Nigeria economy?
2. Does deregulation really contributed to the development of Nigeria economy
3. What is the problem militating against deregulation in banking industries?
4. Has deregulation in Banking Industries concern loan granted to individuals and corporate body?
5. Do benefit from this deregulation?

RESEARCH HYPOTHESIS

    The above questions are required to test the following hypothesis.

Ho:   there is no significant relationship between and development of Nigeria Economy and deregulation in banking industries.

Hi:    there is no significant relationship between the development of Nigeria economy and deregulation in banking industries.

• THE PURPOSE OF THE STUDY

The study is carried out to reveal the effect of deregulation in banking industries in Nigeria economy. It’s also made it possible to know the effect that banking institute is having no economy whether it is development effect or its economy still stagnant. It bring rise in national income of Nigerians between 1930 and 1948, there was crying for more banks on part of Nigeria to complete with the expatriates in banking operation business.

Another reason for the massive banking development was purely economic.

The banking boom of 1947 to 1952 concealed with the period of activity of nationalists movement in Nigeria. They made the call that the major reason for under development of the country was her economy that was subjected to the British economic. It had the businessman to think of business in banking so as to replace the monopoly of the expatriates in the banking industries.

• THE SCOPE OF THE STUDY

The research work of this study includes the primary information from bank (intercontinental bank plc, Oshogbo, Igbona branch), the senior and junior workers of intercontinental bank plc Oshogbo, Igbona branch, coupled with the discussion on the underlying factors of the system of account, liquidity, profitability and visibility factors that can help economy of Nigeria to be developed, but most of the required data were restricted to certain point. The study will also describe the function and achievement of Nigeria banks after the deregulation of the banking industries.

• LIMITATION OF THE STUDY

In the course of the study, we were faced with a lot of problems, which takes long time together the information required.

It took a lot of time before we can get co-operation of the staff in the banks.

        It also takes a lot of time and stress to convey them that the information required; it’s not to spy out secret of the business.

        They felt reluctant to respond and ignored certain question in the process.

        The financial and time factor are also impeded the process.

• SIGNIFICANCE OF THE STUDY

In the aim of this study, the research work attempt to highlight the effect of deregulation in Banking Industries and how far it has been affecting their operations.