THE IMPACT OF PRUDENTIAL GUIDELINES AND DEREGULATION ON THE NIGERIAN BANKING INDUSTRY
THE IMPACT OF PRUDENTIAL GUIDELINES AND DEREGULATION ON THE NIGERIAN BANKING INDUSTRY
No Thumbnail Available
Date
1991
Authors
ISMAIL, Yusuf Barde
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
ABSTRACT
The deregulation of the Nigerian financial system in 1987 until recently,
magnified financial and other forms of risk in the banks' that were hitherto
minimal.
The systemic risk which has now increased due to the deregulation
brought the need to focus more attention on the operations of banks, their risk
exposure and ways to eliminate or minimize such risks. It was in the light of such
concerns that the Central Bank of Nigeria (CBN) came out with the prudential
Guidelines in November, 1990, which is aimed at streamlining banking operation
in the country by creating a sound capital base and the application process.
This project is written primarily to examine the impact of the
implementation of the guidelines on bank's financial risk management. It will also
seek to analyze the operation of prudential guidelines.
The instrument used by the researcher in collecting information include
secondary data - published literature and primary data - questionnaires and
interviews to complement the secondary data. The bulk of the data were culled
from published materials which were mainly available from CBN Annual report,
Annual report of Union Bank and materials from NDIC, write - up by associates
of NDIC in journals and magazines and comments by scholars like Prof.
Nwankwo.
The prudential guidelines were well implemented and as a result of proper
implementation and monitoring the activities of commercial Banks by the CBN,
some banks who had inadequate capital base found it difficult and even up to
date still finding it difficult to operate successfully under the current banking
guidelines due to it stringent requirements and hence, such banks condemned
the guidelines as an unimaginative invitation of American system and that the
guidelines are too stringent for the banks in the country. -While the giant banks
like the likes of the case study see it as timely and appropriate measure that
returned the sector to the part of profitability and sanity. This is because most of
the banks were declaring paper profit before the implementation of the guidelines
and during and after the guidelines' implementation, many banks declared loss.
Although the problem of capital inadequacy and the attendant risk
remained, the guideline has created an increased awareness of the risk by both
operators and supervisors. The guidelines also made banks to classify their
loans as performing and non-performing by reducing their risk of in coming bad
debts.
Description
BEING A RESEARCH PROJECT SUBMITTED TO THE
DEPARTMENT OF BUSINESS ADMINISTRATION, AHMADU
BELLO UNIVERSITY, ZARIA. IN PARTIAL FULFILLMENT OF
THE REQUIREMENTS FOR THE AWARD OF MASTER DEGREE
IN BUSINESS ADMINISTRATION
Keywords
IMPACT,, PRUDENTIAL,, GUIDELINES,, DEREGULATION,, NIGERIAN,, BANKING,, INDUSTRY,, CASE,, STUDY,, UNION,, BANK,, NIGERIA, PLC