CHAPTER ONE

1.0     BACKGROUND OF THE STUDY

Commercial banking in Nigeria dated back to 1892, when what emerged as the bank of British West Africa (now bank of Nigeria) was established. This was followed in 1917 by the Barclays bank now Union Bank of Nigeria.

The Nigeria banking scene was monopolized by these two banks until 1933 when the national bank of Nigeria ltd was established. The first successful indigenous commercials bank in the country was established, (though in October 1992, the national deposit insurance corporation NDIC) advised the financial firm. The bank was indebted to the NDIC for about N1bn and has a negative asset valued at N1.8bn meaning the liabilities of the bank was more than its assets. Prompted by the success of the NBN Ltd after it was established. Several Nigerians made attempts to set up commercial banking institutions between 1933 and 1951. But many failed due to mismanagement and under capitalization. This was hardly surprising since there were no regulation of any kind to end operations of the bank besides there was not central bank to supervise and assist in establishing the banking system. The banking ordinance of 1952 was the first attempt to provide a regulatory framework for the development of a sound banking industry in Nigeria. Commercial banks activities in the period (1959-1966) is the fact that the central bank of Nigeria (CBN) was established at the beginning of the period (1958)

Central bank of Nigeria main  functions are:

1. To issue tender currency in the country
2. To maintain external international value of the naira

• To promote monetary stability and some financial structure

Central bank of Nigeria is also charged with the responsibility for developing the money and capital market in Nigeria. The CBN also acts as banker and financial adviser to the federal government of Nigeria as well as banker to other banks in the country so, one can say that the establishment of the CBN led to a continuous strengthening of banking in Nigeria and also within a relatively short period (1959-1966)  today, there are more than 50 commercial banks in Nigeria with balances all over the county.

Generally, commercial banks have a great role to play and have a major impact on the economic social and political spheres of any national, carrying out its dual debts transactions.

The role of information technology in commercial banks can not be over emphasized. Banking basically involves thousands of transactions that are made daily and records may be needed for references, his as well as cross checking and records of accounts one a transaction is made it must be recorded in a stated form such transaction includes settlement of cheque , the provision of regular  debits and credit exchange transactions one case see that most of the banks transaction are computerized and processing of data and computer makes it possible for these functions to be performed accurately and fast a s computers are machines that by their design are able to accept s tore, process and retrieve information the main advantage of computer in performing these functions is its speed, accuracy and large storage capacity.

Communication is very important in banks, as the banks have to deal with their correspondents in other financial centre, because banks can not operate in isolation. It has to keep regular contact with its other associates and correspondents in Nigeria. All banks receive directives regarding their operation from the central bank communication (information) technology available includes telex, Facsimile (Fax) electronic mail station, satellites modems etc