In essence, the shadow banking system decomposes the simple process of. The role of the financial system on economic development has attracted and. The banking system in nigeria is regulated through the central bank of nigeria. Evidence of banking system strengthening, largely as a consequence of these. The history of banking is intertwined with the history of money.
Consequently, electronic banking system has become an important practice among commercial banks in nigeria, owing to the fact that the introduction of this banking system has improved banking efficiency in rendering services to customers. The invention of banking preceded that of coinage by several thousand years. This article focuses on the history of nigerian banking system, its evolution and some of the components contained in its structure as. The industry has grown beyond optimistic expectation.
The role of ebanking on operational efficiency of banks. This is the socalled shadow banking model of financial intermediation, as described, for instance, in pozsar et al. Central bank of nigeria research series 1993, definition and explanation of the structure of the nigerian financial system. Given the current global financial crisis and its effects on all other sectors, this essay provides useful insight into the current state of the nigerian banks and their corporate governance. The next bank was bank of hindustan which was established in 1870. Issues in banking and finance is a recommended text for university undergraduates, polytechnic students and professional students of banking and finance, accounting, business administration, economics, insurance, stockbroking and related fields. The second part provides an overview of the banking sector regulations and. Financial sector development and economic growth econstor. The banking industry in nigeria started during the colonial era with the establishment of colonial banks, with the primary aim of meeting the commercial needs of the colonial government. The history of banking in nigeria started in the colonial era.
The structur e of the nigerian banking sector and its impact on. The central bank of nigeria cbn is the central bank and apex monetary authority of nigeria. The remaining 17 banks held 38% of the marketshare in total. The importance, effect, causes, relationship, comparison, history, role, solutions are discussed. This was the year nigeria assumed both political and military control of its territory. The nigerian banking industry and crossborder transactions post.
The east india company established the bank of bengalcalcutta 1809, bank of bombay 1840 and bank of madras 1843. Federal republic of nigeria and the yearly monetary and credit. Brief history of banking in nigeria from 1990 till date. Nigeria is home to a concentrated banking sector, with the 5 largest banks accounting for 62% of total commercial bank s assets in 2016. The banking system generates wealth in the economy and facilitates income. Israel, kenya, south korea, lebanon, malaysia, mexico, nigeria, pakistan, the. Central bank of nigeria understanding monetary policy series 7, july 2011 editorial team editorinchief managing editor editor. Get free research paper on effects of banking sector reforms on nigerian economy period 2000 2011 our project topics and materials are suitable for students in nigeria with case studies in pdf, doc. Igbunu richard department of computer science, school of sciences, college of physical education, mosogar, delta state. History apart, it was the merchant banker who first evolved the system of banking by trading in commodities than money. This, combined with restrictive regulations, the high cost of banking services and a lack of financial education, creates high barriers to traditional banking and other financial services for rural. The importance, how to, effect causes relationship, comparison, history, role, solutions are discussed. The digital financial services landscape in nigeria. Fsap, to assess the effectiveness of countries banking supervisory systems.
For specific terminology please refer to the ecb glossary. Independence from british rule came to pass in nigeria on the 1 st of october, 1960. The evolution of banks and financial intermediation. It is believed that the growth opportunities are enormous given its over 150 million population, vast land and plenty of resources. But, lets stay on our topic and begin to mention some significant years in the modern nigerian banking history, from 1990 till date. The history of banking operation and supervision in nigeria could be traced to the period between 1892 and 1894 when african banking corporation and first bank of nigeria which was formerly known as the bank of british west africa bbwa was established5. And in fact, the role they played in the development of nigeria s economy can never be underestimated. The paper concentrates on the commercial and merchant banks, which together accounted for 85 per cent of the total assets of the main financial institutions in nigeria, excluding those held by the. Nzotta 1999, concise introduction and definition of the nigerian financial system. Specifically, the present system of banking was launched in nigeria in the year 1892 when the african banking corporation. Hitherto, the banking sector in nigeria had undergone four phases of bank sector reforms since the commencement of structural adjustment programme sap. The evolution of financial systems in preindustrial economies, finance was largely concerned with the development of a medium of exchange.
Challenges of the regulatory authorities and the aw y forardw adewuyi, i. The 1958 central bank of nigeria ordinance came into force on 1 st july 1959 and since then the central bank has through a series of legislation assumed wider powers and increasing prominent loans in the development of nigeria s banking industry. In view of the importance of the banking sector in economic development and the. The history of cbn dates back to the g paton report of 1892 1952, there was an enquiry by the then colonial administration to investigate banking practice in nigeria. Core principles for effective banking supervision bis. Bank capitalization is the act of supplying longterm funds to a bank in order to. This study aims to investigate the effect of information technology in the banking system of bank keshavarzi iran.
An analytical synthesis of perfomance and main issues teboho moja visiting professor of higher education new york university department of administration, leadership and technology new york, ny. The issue under discourse bothers majorly on nigerian banking system, supervision and its challenges. But the first bank in the modern sense was established in the bengal presidency as the bank of bengal in 1806. The central bank of nigeria cbn is the central bank and apex monetary authority of nigeria established by the cbn act of 1958 and commenced operations. The nigerian banking system is one of the significant sectors contributing to the growth of nigeria s economy. In the context of nepal, it is very difficult to trace the correct chronological history of the banking systems in nepal because there are no sufficient historical records and data about banking in nepal. Armstrong money and the evolution of banking while prostitution has long been regarded as the first profession and lawyers as close second, the banking profession is clearly the third oldest known to humankind.
Nigeria deposit insurance corporation decree 22 of 1998. One cannot simply dispute the advent of technology has unilaterally disrupted the customary business principles over the few preceding decades. Exposures of the nonbank financial sector to market risks have. Arising from the three major roles of the cbn in the areas of monetary policy, financial system stability and payments system oversight, the cbn. As at that time, nigeria was still following the british system of government in which there is a prime minister and a ceremonial president.
Notwithstanding these changes, the structure of the banking sector prior to consolidation stifled its. Modern banking originated in italy around 1150 as jews fleeing persecution brought new practices, including discounting, to the merchant banks of the italian piazzas. The evolution of nigerian banking system, supervision and. From early merchant banking to the modern international banking system. Government of nigeria is a banking system that is part of the global change, and which is strong and reliable. The oligopolistic structure of the nigerian banking system has been.
This post is about banking in nepal, a history of the banking system in nepal. The ordinance was designed to ensure orderly commercial banking and to prevent the establishment of unviable banks. The nigerian financial system consists of banks and nonbank financial institutions which are regulated by the central bank of nigeria cbn and the federal. Get free research paper on electronic bankingproject topics and materials in nigeria. Banking appears to have originated in ancient mesopotamia.
Most of the economic duties that would have been handled by the national banking system, in addition to regular banking business like loans. The act also provided that the central bank is the. In nigeria, over half the total population lives in rural areas, and only 39% of those living in rural communities have access to electricity. The structure of the nigerian banking sector and its impact on bank performance.
The data were then analyzed using the exact percentage and the 5point likert scale to determine the impact of information technology in the banking system affairs. Barter was inefficient, transaction costs were high, and the lack of a medium of exchange limited the extent of the market and the opportunities for specialization. The commercial bank was founded in 1924 by local businessmen in oglethorpe county with the mission of serving the financial needs of the citizens and businesses of the area. This is approved for students in accountancy, business, computer science, economics, engineering, arts. Banking in nigeria has gone through very changes within this decade. Technological innovations have served, and are serving as a means of fashioning new markets whilst making. At the end of 1988, the banking system consisted of the central bank of nigeria, fortytwo. Over the years, it has achieved tremendous growth in structure and activities.
Pdf the structure of the nigerian banking sector and its. The authorities have closed 31 banks, increased minimum paidin capital requirements tenfold to n500 million n1 billion for new banks and forced the majority of the remaining banks into compliance. The impact of information technology in banking system a. The next landmark in the history of banking business was the enactment on 15th may 1958, of the central bank of nigeria act which provided for the establishment of a bank to issue, the notes and coins of which should be legal tender throughout nigeria. Thus, the banks domestic or foreign are investing more on.
Well established framework for financial stability policy formulation. Introduction the banking industry remains one of the brighter spots in the nigerian economic landscape. Money and the evolution of banking armstrong economics. Prior to the inquiry, the banking industry was largely uncontrolled. Financial system also consists of interrelationships among the persons and the bodies that make up the economy. The central bank of nigeria regulates the nigerian banking industry. Ancient types of money known as grainmoney and food cattlemoney were used from a time of around at least 9000 bc, as two of the earliest things that could be used for the purposes of barter. Pdf the state and future of the banking industry in nigeria. Over the period, the number of banks expanded five fold, banking operations were substantially deregulated, competitions increased and banks were forced to be more innovative and service oriented. Commercial banks have over the years serve as the mainstay for the provision of financial services to nigerians even though they are under the watch of the central bank of nigeria. The banking industry in nigeria started during the colonial era with the establishment of colonial banks, with the primary aim of meeting the commercial needs. Paton report which emanated from the enquiry was the basis for the first banking ordinance of 1952. It is a banking system which must be efficient, depositors can trust and investors can rely upon.
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