CRISIS MANAGEMENT IN BANKING INDUSTRY
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CRISIS MANAGEMENT IN BANKING INDUSTRY
ABSTRACT OF Crisis MANAGEMENT IN THE BANKING INDUSTRY
In summary, the purpose of this research is to investigate some problems that exist in the banking industry and to propose possible solutions for achieving crisis-free banking in Nigeria.
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The cuts that constitute a crisis are inexhaustible, but forgery and loss of public confidence due to management attitude are prominent among them. However, untrained employees and bank employees who now hold positions in the bank contribute to the hardship that leads to the banking crisis.
INTRODUCTION TO CHAPTER ONE OF CRISIS MANAGEMENT IN THE BANKING INDUSTRY
1.1 STATEMENT OF THE PROBLEM
Given the critical role that banks should play in creating the rational economy as sources of funds for savings, investment, and job creation. It is necessary to emphasise that, despite its progress, the Nigerian banking sector has failed to effectively achieve this purpose.
The reason is not simply that certain banks have collapsed, but there are additional issues related with them that the researcher tries to address. These issues include:
– The loss of public trust in the banking industry as a result of the sector’s crisis (Ekezie 1994).
– The regulatory supervisory agencies’ failures in banding the crisis (Eh bokphA 1993).
– How the troubled bank’s ownership structure contributed to their plight (Ojir 1998).
Numerous difficulties have arisen and represent a crisis in the banking business, and this effort will seek to fix them.
IN THE BANKING INDUSTRY, CRISIS MANAGEMENT
1.2 WHY IS THE STUDY BEING CONDUCTED?
The financial industry is in crisis, and it impacts every element of the economy like a public dumped into a pool of water.
1. It has resulted in deposit ran: This has a negative impact on the liquidity and earning capacity of banks, resulting in a decrease in the availability of inventible funds in the economy.
2. It has resulted in rate increases as depositors demand higher rates in exchange for perceived higher risks of bank failure and financial loss.
3. Banking industry crises have resulted in unemployment, which has resulted in a drop in
aggregate demand and, as a result, a drop in output.
4. Banks are critical to an efficient and effective payments system in any country. If a bank fails, the payments system becomes precarious because the link between the real and financial sectors,
including international settlements, is severely hampered. This inhibits the bank’s intermediation role and the country’s development (Ojir 1998). This research will assist bank management in managing successfully and efficiently.
IN THE BANKING INDUSTRY, CRISIS MANAGEMENT
1.3 THE SIGNIFICANCE OF THE STUDY
The researcher expects to do something significant at the end of the project. This project will assist many people who are interested in banking. It will also assist them in determining the causes of the crisis, which will be of enormous service to the persons listed below.
1. Bank and finance scholar:
It would inform the students and provide them with the opportunity to appreciate their contribution to their studies.
2. Bank: When banks identify fraud or poor loan management that leads to hardship, they would endeavour to prevent it in order to avoid liquidation.
3. Future academics: It will be useful to future academics who are interested in the causes of distress, economic ramifications, and potential solutions.
4. Investors: It will inform them of the existence of distress in banks, allowing them to avoid investing in banks where there is a distress problem.
5. Regulatory agency officials: It will assist regulatory agency officials in understanding ways to prevent distress from occurring.
It will also assist to educate the public on how financial instability has caused a slew of problems in our economy.
1.4 DEFINITION OF TERMS
1. Crisis: A period in which banks are in grave jeopardy.
2. Distressed bank: A bank with managerial, operational, and financial problems.
3. Management efficiency: A measurement of management qualification, competence, and achievement.
4. Bank: A place where money is kept and paid out on demand where associated activities take place.
5. Regulatory/supervisory Authorities: These are the Central Bank of Nigeria (CBN) and the National Deposit Insurance Corporation (NDIC).
6. Operators: The management and personnel of a bank, including the shareholders.
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