CHAPTER ONE

1.1     BACKGROUND OF THE STUDY

Planning is required in all forms of decision making in order to ensure an effective and efficient utilization of available scarce resources.

The resources to satisfy the basic needs of the people and relatively scarce in relation to their demand. Therefore, there is need to plan for available resources in such a way that maximum satisfaction could be attained with minimum resources. In planning consideration has to be given to the form of control that should be exercised to ensure that the plan overall attains its objectives.

Finance is the most vital part of process of banking. This is because the level of success a bank achieves is related to the size of its financial resource. Even with the most liberal manpower, a bank cannot register any appreciable position. So, financing of resources in bank does not only mean the acquisition of resources but also efficient planning, management and allocation of this resources and valuation of the capital of the organizational objectives or goals.

In any business sector, an adequate balance and flow cash is essential. A business must therefore, be able to meet its commitment at all times, for this a bank must plan its capital requirements well in advances to ensure that it can get the funds it needs and when it needs them most.

A bank cannot afford to stand still. It needs cash for its daily transactions. It is essential for any bank   to effect improvement to introduce other means of sourcing funds, and to expand where conditions are favorable.

All these cannot be achieved without effective financial planning and control. A bank definitely does not remain static, there is always the tendency to go forward or backward but not neglected to stagnancy. The direction the bank takes therefore depends on the effectiveness of the financial management planning and control team.

More than ever before, a bank should mobilize its financial resources for the attainment of their corporate goals. Financial and material wastes cannot be afforded in this time of economic recession whatever the nature of the bank, the same principles are followed regarding financial planning and control.

A lot of banks liquidate due to resources today. Had the money realized at the time of economic boom been invested wisely, the country would still have been comfortable today inspite of the fall in the oil prices. This is what exactly happens to some organization where knife and flesh are given solely to one who does not know anything about management considering the investment of the country surplus money made from profitable project and venture which would have been beneficial in the future for the improvement of telecommunication, settling upon research, Development project (R and D) and institute for both engineering and Agricultural field as well as improving electricity supply in the entire economy. Instead the resources are wasted on grandiose project for some individuals, personal benefits. This paramount in most of the disable organizations, where finance are embarked upon without planning within the short time may lead to obsolesce, deterioration etc.