CHAPTER ONE

Government established bank money for development purposes and the vole of banking industry in an economic development cannot be over emphasized. Government owns some banks, for example, first Bank of Nigerian and so on. Both banks. However, banks in Nigerian and other countries of the worlds are established to carry out the following functions;

1 Government of loans to customers

2 Safeguarding of customers money and some valuable assets such as certificates and so on.

3 Management of customers’ investment and advising on insurance matters.

4 Providing facilities for the financing of international trade, example documentary credit.

5 Creating money by the central bank of that country.

6 Mobilization of saving and other deposit.

7 Providing advisory services.

8 Providing foreign exchange facilities for traders.

9 Night safe facilities to customers.

10 Agency services to customers who authorized their banks to pay and collect cheques on their behalf.

However, the above function and duties of banks is just to mention but a

few because banking industry is dynamic in nature. It varies on public confidence and due to the influence on the nations economic life, it needs high quality management and organizational structure with which it can attain maximum operating efficiency and profitability .

Since the advert of structural adjustment programme [SAP] and its deregulation –policies , banking industry in Nigeria has been receiving a number of policy shocks and the new banks felt it most . Such policy or guideline include :- The central bank of Nigeria guidelines on reserve requirement and limited capital base for establishment of new banks.

Other direction are the withdrawal of government banks . The payment of interest on current account cancellation of foreign denominated loans . The liberalization of foreign exchange market and the introduction of the controversial national deposit insurance corporation .