AHMADU BELLO UNIVERSITY ZARIA FACULTY OF ADMINISTRATION DEPARTMENT OF ACCOUNTING AUDIT MANAGEMENT ACCT 707 USENI YUSUF ONWUDE MBF/ADMIN/0483/2009-2010 [pic][pic]INTRODUCTION SOLUDO.C (2004: 4) The Nigerian banking system has undergone remarkable changes over the years, in terms of the number of institutions, ownership structure, as well as depth and breadth of operations. These changes have been influenced largely by challenges posed by deregulation of the financial sector, globalization of operations, technological innovations and adoption of supervisory and prudential requirements that conform to international standards. It is widely believed that savings and investment must go hand in hand for …show more content…
Also different banks employ different banking applications software to gain competitive edge and introduced various electronic products. The challenge here is that some of these ICT packages are not compatible or were not properly understood before been introduced and banks have already incurred huge costs in the acquisition of these technologies SOLUTIOS Economic environment: With the federal government’s intentions to increase the security, electrical and infrastructure aspect of the economy, these banks have an opportunity to assist prospective business men tap into such lucrative ventures. Prohibiting banks from using depositors’ funds for proprietary trading, private equity or venture capital investments. Close monitoring and stiffer penalties to banks that do not adhere to the federal government’s directive in helping other sectors of the economy grow especially the manufacturing aspect of the economy. Regulatory, Supervisory and legal environment: Akpala P.E (2OO6:8) Risk based supervision in place of compliance based, supervision was introduced, and Closer Corporation between the various bodies should be strengthened. Corporate governance: Reform measures will also include education of board directors on their responsibilities and on the unethical and allegedly fraudulent activities and the penalties they carry. Prohibiting banks from using depositors’
This necessitated the need for development of regulatory measures for the industry. Bank regulation is a legal structure by which all financial
Regulatory environment consist of several laws and regulations that has been developed by federal, state, and local governments in order to limit control over business practices. The regulatory environment plays an important role in the positive operation of the financial sector and in the efficient management and integration of capital flow and domestic savings. “The value of the claims of financial institutions on borrowers is dependent upon the
• Governance and oversight: Assessing business model and strategy changes and reinforcing the importance of sound corporate governance appropriate for the size and complexity of the individual bank. A specific focus will be on determining the adequacy of strategic, capital, and succession planning. Examiners will assess whether the plan is appropriate in light of the risks in new products or services. If applicable, examiners will assess the bank’s merger and acquisition processes and procedures.
Reforms have been created to close the gap of corporate governance and financial reporting in order to prevent the reoccurrence of corporate scandals. Congress created a federal bill named the Sarbanes-Oxley (SOX) Act in July 2002 in response to the Enron and WorldCom scandals that introduced major changes to the regulation of corporate governance and financial practice in order to protect the interest of investors and the public (“Sarbanes-Oxley Act Summary and Introduction,” 2003). The Act is extensive in corporate governance, which is a comprehensive theory concerned with the alignment of management and shareholders interest. The sections of the bill cover responsibilities of a public corporation’s board of directors, adds criminal penalties for certain misconduct, and requires the SEC to create regulations to define how public corporations are to comply with the law (Slater, 2002). The SEC has issued more than twenty rules implementing provisions of the Act pertaining to corporate governance, financial reporting, and audit functions. The SEC has worked with NYSE and NASDAQ to harmonize the new Corporate Governance Rules. Throughout the rest of this paper, the more detailed listing requirements of the NYSE and NASDAQ will be discussed. Since the reforms are extensive, these were selected for the discussion: the increased role of independent directors, independent audit committee, independent directors on the nominating/corporate governance committee, the
The Board has made a system for dealing with the Company, including embracing applicable inward controls and a danger administration process which it accepts are suitable for the Company 's business. The primary corporate arrangements and practices embraced by the Company are compressed underneath. Also, numerous administration components are contained in the constitution of the Company.
It is against this background, that besides the introduction other parts of the paper are structured as follows. Next to the introduction, the paper takes a look at the structure and development of the Nigerian financial system before explaining the role of the financial system in the Nigerian economy. Next to this is the section that addresses the history of banking reforms in Nigeria and the nature of the reforms. The last part concludes the paper after a critical look at development implications of banking sector reforms.
Economy of many nations is currently at distress due to current plunge of oil price the international market. This sink in crude oil price produces an economic shock especially to the poor and developing Countries that depend on crude oil revenues to balance their budgets (Iwayemi, & Fowowe, 2011; also see Effiong, 2014). Nigeria, being one of those nations, is currently experiencing economic crisis. For instance, many states in the federation presently can no longer pay their employees’ salaries or provide basic services to their citizens. They are borrowing money or requesting for bailout from the Federal government to fulfill their obligations to their people. The shocking effects of this oil price drop extended
While banks have succeeded in leveraging available technology and provide alternate avenues to customers for banking services, the challenge it faces today is optimizing the usage of these channels.
There has been a number of banking reforms in Nigeria with varying attendant effects. However, the effect of the current reform originating from the conspicuous effect of the economic meltdown has become of great concern. While the reform of 2004 cannot be exonerated from its attendant casualties of job loss among others, the current reforms seems to have raised some dust. Following the financial stringencies in the economy and the role of banks in a depressed economy, the CBN governor, Mallam Sanusi Lamido Sanusi, on August 14, 2009 relieved some banks’ CEOs of their duties for wrong exercise of executive responsibility.
For instance, the inflation rate rose from an annual average of 25.96 per cent between 1986 to 1990 to an average of 48.92 per cent from 1990 to 1995 while the economy grew in real terms at an average of 5.99 per cent and 1.53 per cent respectively. The performance of the naira exchange rate has also been very poor with an average exchange rate of N5.2/$ between 1986 and 1990 reaching an annual average of $99.15/$ between 2001 and 2004, an average depreciation of 1806.73 per cent under two decades. All these and other factors peculiar to individual banks have jointly influenced the behaviour and performances of the banking industry as they try to adjust to the vagaries of the macroeconomic environment. Olaniyan (2000) has indicated that inflation and its variability are part of the important indicators of macroeconomic instability in Nigeria with significant negative impact on investment. This study sets out to investigate specifically, whether instability in the macroeconomic environment impacts positively or otherwise on the lending behaviour of the Nigerian banking sector. As observed by Baum, Caglayan and
With the latest CBN regulation and the systematic withdrawal of Federal funds from the banks, a lot of banks are on the brink of extinction. As a result of this a lot of banks are now either going public or trying to position themselves as banks of choice for possible merger or acquisition by other banks. This new development would also impact on employment, as most top management would be affected and other young staff would be thrown into the labour market in the bid to have the required number of directors by the regulatory authorities and on the economy at large.
The area of study o this research work is to determine the effect of monetary policy on the performance of banks in Nigeria. This study will cover all the commercial banks that have been in existence since 1975-2004. More so, the aggregates rate is used in assessing their performance.
Financial System is the most important institutional and functional vehicle for economic transformation of any country. Banking sector is reckoned as a hub and barometer of the financial system. As a pillar of the economy, this sector plays a predominant role in the economic development of the country. The geographical pervasiveness of the bank coupled with the range and depth of their services make the system an indispensable
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.
the other hand, is either a merchant, or a trader, or a member of the